With the rallies in gold, Treasuries and utilities entering their third week, sustainability becomes the key thing to watch. Perhaps the Fed is worried about the labor market? The Bank of Japan appears to be heading full steam towards a rate hike this month and/or the elimination of yield curve control. It comes as no surprise that the yen is the most important currency in the market today.

Is risk-off coming? If you’re willing to look beyond just the S&P 500, the Nasdaq 100 and bitcoin, the signs are there. Investors have shaken off the recent rebound in inflation, but that may not be the wisest move. If there’s anything that will kill the bullish optimism surrounding the tailwind of a central bank loosening cycle, it’s this. The dollar index overall has been trending lower for about three weeks.

We could still see another rally here, but conditions don’t appear quite as unabashedly bullish for tech as they were. Now that yields are stabilizing, inflation is stabilizing and the large-cap/small-cap gap is starting to come back into balance, I think the market has a much better chance of reacting to larger underlying macro risks. The BoJ may be forced to abandon the idea of exiting negative interest rate policy for the time being.