Since the war began, Goldman's Matt Kaplan notes that Thursday/Friday have seen dramatic losses relative to the rest of the week...
Source: zerohedge
US 10 year flirting with the huge 4.4% level. A decisive close above this resistance area and rates risk squeezing more.
Source: TME
US private credit is diverging from public markets at an alarming pace
This comes as the private credit market faces growing investor scrutiny over valuations, underwriting standards, and rising redemption requests from clients. There is also increasing concern that AI will disrupt the software companies that make up a large portion of private credit portfolios. Historically, the private credit proxy index has had a 94% correlation with high yield credit spreads. If the correlation reasserts, we could see a spike in high yield credit spreads, which could eventually spread into stocks and trigger a bear market. Credit markets tend to lead equities, and right now, they are flashing a clear warning. Source: Bloomberg, Global Markets Investor, Macrobond
What happened to luxury stocks ?
Current Drawdowns: EssilorLuxottica: -39% Hermès: -41% Ferrari: -43% LVMH: -49% $RACE $RMS $MC $EL Source: Fiscal.ai
Range or breakdown?
Markets are at a decision point. The big range is still holding, but short-term trends, bond stress, and positioning shifts are building pressure. These setups don’t linger, one side eventually wins. Source: TME
Pinpointing the next “Taco” moment has become Wall Street’s newest fixation.
This week, Deutsche Bank’s head of cross-asset strategy, Maximilian Uleer, introduced a “pressure index” designed to act as a proxy for potential shifts in rhetoric or strategy from the US administration. The index incorporates several indicators, including the one-month change in Trump’s approval ratings, one-year inflation expectations, movements in the S&P 500, and US Treasury yields. Source: FT
Ares Restricts Withdrawals Amid Private Credit Surge
Ares Management capped withdrawals at 5% from its $10.7B private credit fund after $1.2B in redemption requests, fulfilling only ~$524M. The fund still grew due to $708M in new commitments, but liquidity stress is rising across the $2T private credit market, with $13B requested this quarter and $4.6B unmet. Concerns over loan quality, slower PE exits, and aging LBOs are driving investor caution. Despite this, Ares reports a healthy portfolio and ~$5B liquidity, highlighting opportunity for long-term holders. Source: Financial Times
This is notable news from Bloomberg given Apollo's standing in private credit:
"Apollo Global Management Inc. is curbing redemptions from one of its largest non-traded private credit funds for retail investors, becoming the latest alternative asset manager to grapple with a surge in such requests. The $25 billion business development company, Apollo Debt Solutions, capped withdrawals at 5% of outstanding shares Monday after clients sought to redeem 11.2%." Source: Mo El Erian on X, Bloomberg
