Weekly Bubble Risk Monitoring Report

Overview

This week’s report reviews global market liquidity, AI bubble dynamics, and investor sentiment indicators.
U.S. long-term yields fell below 4%, and the VIX retreated after a brief spike, signaling temporary easing in financial conditions.
However, due to the U.S. government shutdown, CPI and retail sales data releases were delayed, leaving macro visibility partially clouded.
Meanwhile, AI semiconductor supply-demand conditions remain tight, with memory prices climbing again. Investor sentiment stayed in the “Fear” zone.

【Observation Categories】

1. Macro Financial Environment

  • U.S. 10-year yield: below 4% (3.99%)

  • Real yield curve turned slightly positive (mild steepening)

  • Fed/ECB balance sheets stable to slightly shrinking

  • VIX declined from 22 to 19

  • Major central banks remain cautious, maintaining current policy stance
    Assessment: Stable
    Summary:
    Long-term yields eased and volatility subsided, slightly loosening overall financial conditions.
    Both the Fed and ECB maintained stable balance sheets, indicating limited systemic stress.

2. Capital Flows & Credit Conditions

  • U.S. MMF assets: $7.37 trillion (near record high)

  • ETF flows: inflows concentrated in tech (notably QQQ)

  • HY credit spreads: stable around 3%

  • No visible signs of credit stress
    Assessment: Stable
    Summary:
    Cash levels remain abundant, and risk appetite returned modestly.
    Credit markets show no systemic strain, suggesting continued liquidity support.

3. Corporate Earnings & Fundamentals

  • ASML: Q3 revenue €7.5bn, net income €2.1bn, gross margin 52%

  • TSMC: steady growth driven by AI/HPC demand

  • AI-related firms maintain strong revenue and profitability momentum
    Assessment: Stable
    Summary:
    Earnings in the AI sector remain solid, driving overall market resilience.
    Non-AI sectors lag, but EPS expectations for major indices remain supported.

4. Sector Valuation Trends

  • SOX Index: rebounded ~5.8% from last week’s low

  • Tech ETFs (QQQ, SOXX): renewed inflows

  • AI-related valuations remain elevated (high PER/PSR multiples)

  • Persistent valuation gap vs. defensive and industrial sectors
    Assessment: Caution
    Summary:
    Semiconductors rebounded sharply, but overall valuations remain stretched.
    Sector rotation signals are still limited—tech dominance continues.

5. Real Economy & Supply-Demand Data

  • U.S. CPI / Retail Sales: delayed due to government shutdown (now Oct 24)

  • CARTS retail index: nominal +0.5%, real +0.2%

  • China Sept exports: +8.3% YoY (but –27% vs. U.S.)

  • DRAM / HBM prices: rising +8–13% for Q4 forecast
    Assessment: Caution
    Summary:
    Consumption shows moderate growth but awaits confirmation from delayed data.
    Memory market tightening persists, indicating ongoing AI-related supply strain.

6. Sentiment & Market Psychology

  • VIX: fell from 22 to 19

  • Put/Call Ratio: total 0.93 / equity 0.72 (risk-off bias)

  • AAII bullish sentiment: 33.7% (bearish majority)

  • Fear & Greed Index: 27 (“Fear” zone)
    Assessment: Caution
    Summary:
    Investor sentiment remains defensive despite lower volatility.
    Greed/Fear indicators and survey data show persistent risk aversion.

7. Meta Narrative & Market Themes

  • U.S.–China tariff and export-control risks resurfaced (AI supply chain concerns)

  • Some strategists (e.g., UBS) reiterated bullish views on AI-driven productivity

  • Power supply and data-center constraints became a stronger market narrative
    Assessment: Caution
    Summary:
    The storyline is shifting from “Generative AI” toward “infrastructure bottlenecks” and “trade friction.”
    The AI theme remains central but surrounded by rising systemic and resource constraints.

Overall Assessment

🟡 Caution (Localized Overheating)
While rates and volatility stabilized, the market shows continued concentration in AI-related assets and sentiment imbalance.
Structural overheating risks remain, even as short-term calm returns.

Key Highlights of the Week

  • Monitor delayed CPI and retail data (Oct 24 release).

  • Semiconductor memory price increases are fueling short-term tech rebounds.

  • Fear & Greed Index remains low at 27, showing persistent caution among investors.

Key Indicators to Watch Next Week

  • U.S. September CPI / Retail Sales (final release)

  • Major AI semiconductor & hyperscaler earnings

  • FOMC / ECB minutes and official remarks

  • MMF & ETF flows, sentiment indices (VIX, PCR, AAII)

Note:
This report was prepared with the assistance of ChatGPT (GPT-5 Thinking).
While based on reliable public data, some discrepancies may arise from data lag or interpretation differences.
Investment decisions should be made at the reader’s own discretion and responsibility.

Comments

Post a Comment

Popular posts from this blog

Today’s Macro & Geopolitical News (2025-12-29)

United States With the year-end shortened week underway, focus shifts to the “FOMC minutes” and fine-tuning expectations for early-2026 cuts (markets are prone to think in terms of the “late stage” of the easing cycle). The policy rate is reported in the 3.50–3.75% range; the near-term tug-of-war remains between “how the slowdown unfolds” and the risk of inflation re-accelerating. In housing, pending home sales and house-price indicators tend to drive headlines; the key question is how much elevated rates continue to restrain demand. Equities, after strong year-to-date gains, can be dominated by rebalancing flows; thinner liquidity can amplify day-to-day swings. Europe For the covered date (overseas: 12/28), fresh headlines on major data/monetary policy are limited (news flow typically thins into year-end). Rates sit at elevated levels—Germany 10Y around 2.86% and UK 10Y around 4.51%—reflecting a tug-of-war between disinflation and fiscal/supply dynamics. With holiday-thin trading, bot...
Read more

Today’s Economic & Geopolitical News (2026-01-02)

United States Early-year positioning is again clustering around “AI + data centers,” with sovereign-style capital tending to favor U.S. assets tied to digital infrastructure and AI—supportive for U.S. risk assets at the margin. At the same time, diversification pressure remains a medium-term theme: newer pools of sovereign capital often originate in emerging markets, which can create periodic rotations away from a single-country concentration. Holiday-thinned liquidity can make price action more position-driven than news-driven; the market can swing between “Fed path pricing” and political headlines. In the near term, attention tends to tilt from “growth prints” to the combination of capital cost (long yields) and liquidity (risk appetite) . Europe Bulgaria’s entry into the euro area underscores continued expansion of the currency union: it can reinforce institutional stability, while reviving scrutiny on fiscal rules and cross-country divergence. As an integration milestone, it can a...
Read more

Today’s Economic & Geopolitical News (2025-12-31)

United States The Fed cut the policy rate by 25 bps to 3.50–3.75% at the December meeting, but the minutes highlighted a wider range of views—making further cuts in 2026 more likely to be gradual and data-selective. Some observers note that a government shutdown can disrupt the continuity of official statistics, pushing market attention toward early-year labor and inflation prints. Housing data suggest cooling: FHFA home prices (Oct) rose +1.7% YoY, implying that improving “price stability” could complement lower rates in supporting activity. Market implication: a tug-of-war between “insurance against slowdown” and “sticky inflation” likely persists; if long yields don’t fall cleanly, equity upside tends to become more selective. Europe European equities were supported by banks and resources, with the STOXX 600 pushing toward the 592 area—showing resilience even in thin year-end trading. The ECB remains centered on a 2.00% deposit rate (in a hold phase), balancing disinflation against ...
Read more