The wide spreads between winning and losing areas of the market was encapsulated in the Equity Long/Short hedge fund stylistic leaderboard where managers targeting growth and AI opportunities far outperformed those focused on old economy value non AI situations.

Macro managers started the quarter capturing market normalizations in April but returns dissipated for some due to a shrinking DM FX and FI opportunity set while leaders for the quarter harnessed returns from EM macro and targeted AI exposures.

We are observing some eye-popping YTD figures from Asian Equity Long/Short exposures. In fact we congratulated one China AI EQ L/S PM a few weeks ago for making 50% YTD returns and they said it was bittersweet because leading peers are up twice that much, if not more.

Over-sized return generation from Asia is not just a function of speculative over-risked AI theme chasing, it stems from the hardwired approach of Asian investors to identifying tech product cycles and opportunity sets across vertical supply chains.

Alphabet’s $85b equity raise came as a bit of a shock given hyperscalers have traditionally been far more inclined to buyback stock rather than sell more.

The developments raise another yellow flag of concern over the general state of the markets, which seems to be moving onto an even more speculative phase of this bull market.

How far the speculation goes from here remains an outstanding debate among investors, but one thing is certain; they don’t necessarily ring a bell at the top, but they sure sell a lot of stock.

Raging inflation, a new fed chair, a goal seeking US presidential administration, what could go wrong?

Here we are in the mid-year malaise where spring’s budding market trends start to consolidate and fresh narratives take hold.

Here we are again. We just experienced the spring, Trump-action induced market swoon followed by a swift, nearly miraculous re-risking in its wake.

Looking ahead, based upon previous Trump presidential years, we have a smooth upward trend over the summer with a bit of turbulence in the fall that will ultimately be resolved in a year-end rally.

As Q1 earnings season starts trailing off, the liquidity drain of seasonality de-risking into the summer is contributing to the near-term headwinds.

We have heard anecdotal stories of the markets starting to behave a bit erratically over the past several trading sessions.

Given “AI job displacement” fears have not yet been clearly reflected in the US employment numbers, one must keep an open mind about the impact of AI on the white-collar labor force of the future.

The resolution of this trend is quite impactful as labor disruptions remain one of the greatest fears of AI, cementing the secular thesis around medium term forecasts of deflation and economic slowdown ensuring an eventual slashing of interest rates back to the zero line.

The snap back in high velocity risk seeking flows is following similar post market shock episodes like the pandemic in March 2020, SVB March 2024 and Liberation Day April 2025.

Market violence and turbulence to the upside and downside in rapid speed has become the ongoing dynamic in price action.

If it feels like an oppressive version of Groundhog Day in the markets for the past 466 days, then you are not imagining things. The statistics demonstrate that Trump's second term in office has unleashed nothing short of chaos on day-to-day price action.