Swan Dive
Broad Market Rally Meet Narrowing Political Window
February 9, 2026 • 7 minute, 14 second read
Markets opened the week with a raised eyebrow. The Dow closed above 50,000 on Friday, a historic feat. And the kind of round number that attracts headlines even when it explains very little by itself.
What mattered: Investors started buying into the physical economy. Which could have much broader implications for the “affordability” fight bearing down on the political class right now. Tech investors need to get reorganized and decide where all this AI infrastructure is going to take the market… and the economy.
For the first time since we began our Grey Swan forecasts, Dow Transports have attracted trader attention. Industrials stayed firm. Banks, insurers, and logistics names drew steady bids.
The old school newsletter crowd got giddy over last week’s close.
In layman’s terms, Dow Theory states that the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) must move in the same direction to confirm a valid market trend. A bull market is confirmed when both averages reach new highs, signaling economic health, whereas a divergence where one index fails to follow the other indicates a potential trend reversal or weak market.
On Sunday Futures, Treasury Secretary Scott Bessent gave a nod to the theory. Bessent described the Dow’s move as capital shifting from paper claims on future AI growth toward businesses that manufacture, ship, lend, and hire.
We’ll be watching today to see if the trend is real… or if the headline 50,000 number is Wall Street’s latest shiny object.
Participation Broadens While Software Stays Under Pressure
The Nasdaq logged its fourth straight down week, pulled lower by the “SaaSpocalypse” in software.
Goldman Sachs’ Software Basket fell 16% for the week. Hedge fund exposure to software shrank sharply, according to Prime Book data.
Lou Miller, Goldman’s global head of Equity Custom Baskets, told clients that buyers remained scarce even as the group entered oversold territory.
In the late 1990s, telecom infrastructure outpaced demand, pricing compressed, and equity valuations adjusted long before usage caught up.
Today’s AI buildout carries healthier balance sheets and real utility, yet capital intensity remains high, and patience wears thin when returns depend on perfect adoption curves.
Glass, Fiber, and Old Companies Finding New Work
Corning offered a reminder that infrastructure often hides in plain sight. The 175-year-old company’s shares reached an all-time high on Friday, up more than 130% over the past year.
The firm signed a $6 billion fiber-optic cable deal with Meta late last month and expects additional contracts from other hyperscalers. Corning also secured a $2.5 billion agreement to supply cover glass for Apple devices.
Analysts pointed out that Corning followed a similar arc in the late 1990s before losing more than 90% of its value during the dot-com unwind. The company argues its revenue base is broader today.
Buyers and sellers will ultimately decide.
Populist Politics Walks Onstage
History offers a reminder about what tends to follow when markets rally and the populists get restless.
Herbert Hoover entered a year before the 1929 crash. By the 1930 midterms, voter frustration reshaped Congress. Republicans lost their working majorities, and Hoover faced resistance at every turn.
The U.S. Office of the Historian marks that election as the moment legislative gravity returned.
Today, the knuckleheads on Capitol Hill face another narrowing window to avoid another government shutdown; another round of out-to-lunch political pandering.
The dramatic fiction this time around?
Funding for the Department of Homeland Security expires before Valentine’s Day. Senators juggle travel plans to the Munich Security Conference while negotiations stall. Senate Majority Leader John Thune acknowledged that the length of any stopgap depends on Democratic support.
Semafor’s Ben Smith described the moment as political gravity reasserting itself, noting how presidential power tends to leak after the first year. He uses as proof the Epstein File’s saga, comparing it to “an oil spill, oozing through global politics and discrediting elites and would-be counter-elites alike.”
Boo.
The faux outrage over Epstein accurately depicts how absurd politics is and how little the things that politicians say and/or pretend to care about have to do with the nation’s money, debt, or future governance.
Optimism Polls Well, Prices Still Bite
Surprisingly, or perhaps better surprising given the tone of today’s media, Gallup reported that 49% of Americans expect economic growth to rise over the next six months, while 50% anticipate stock market gains.
At the same time, 62% expect inflation to increase, and half see unemployment worsening.
Politico noted that the White House hopes larger tax refunds this spring support Republicans later this year. Strategists at the think tank Semfor warn that the boost from taxes will fade quickly if prices remain elevated.
Even the betting markets are looking up. Polymarket puts the odds of a U.S. recession in 2026 at 24%.
Japan’s Election Strengthens Stocks, Pressures Bonds
Japan added another layer to the global picture.
Prime Minister Sanae Takaichi’s coalition secured a legislative supermajority in Sunday’s snap election, according to projections cited by The Wall Street Journal. Investors treated the result as a mandate for higher fiscal spending and reindustrialization.
Japanese equities traded near record highs. Analysts continue to flag risks for bonds and the yen as debt levels rose and spending expanded. A stronger domestic footing also gave Takaichi room to take a firmer line with China while reinforcing ties with Washington.
An Asia Group principal said Beijing’s efforts to isolate her “failed completely.”
Wall Street is still trying to price in the bond market’s sharp reversal of the yen carry trade, which, as we noted on Grey Swan Live! last week with Mark Jeftovic, has as much to do with the bitcoin and crypto sell-off as any other factor.
US Debt and Global Gold Reserves
U.S. debt dynamics continued to press beneath the surface. Interest payments to foreign holders of Treasurys reached a record $292 billion in the third quarter of 2025, more than double 2020 levels.
We have to give a special shout-out to the Statista.com data journalists this morning. They got off their high horse this morning long enough to publish two charts we liked enough to include here. If you follow Statista at all, you know they’re obsessed with globalist fetish causes like climate change. Perhaps the market is changing their tune, too. (Source: Statista.com)
Foreign investors now hold $9.1 trillion in U.S. debt, four times the amount held in 2005. At the same time, central bank reserve composition shifted. Gold’s share rose from 13% to 24% between 2021 and 2025, overtaking the dollar for the first time.
We also add this curious note, too:
We discussed this at length with Mark Jeftovic on Friday as well. The chart comes courtesy of Frank Holmes’ U.S. Global Investors graphics team. Frank will be joining us for Grey Swan Live! this Thursday, February 12, 2026, at 2 p.m. EST.
The central premise – at least from the Trump administration’s point view – is that crypto assets and stablecoins are creating a larger, more efficient market for U.S. Debt and can help prolong the U.S. dollar’s status as a reserve currency in global finance.
In a nutshell, the banking lobby is trying to codify the monopoly too-big-to-fail banks have on your money into the next set of regulations.
If the banking lobby is successful in persuading legislators to help protect that monopoly, it will be an “own goal” of historic proportions.
The Senate will hand the next three years of innovation in the digital space off to the U.S. global competitors and advance the agenda of the BRICS nations… the US dollar will become worthless at a faster pace… and financing the US debt load will take more than a magician’s sleight-of-hand.
Trading this week will tell us whether the capital move toward the physical economy is for real or not. Keep your eye on who’s shipping what, who’s promising more than they can deliver, who owns the debt… and who owns the gold.
~ Addison
P.S. On Friday, Andrew, Mark Jeftovic, and I dug deep into the bitcoin and crypto selloff on Grey Swan Live! We unpacked a set of signals in crypto and Dollar 2.0 digital assets that rarely appear together — and almost never by accident.
As a proxy for the space, bitcoin is down close to 50% after another pullback over the weekend. Now is a good time to know what the sell-off means for gold, silver and the companies we still recommend in our Dollar 2.0 thesis. Check out the replay in the members section of the Grey Swan website.
If you have requests for new guests you’d like to see join us for Grey Swan Live!, or have any questions for our guests, send them here.
