Let’s say you’re the cautious sort. You survived 1987, 2000, and 2008 with most of your sanity — and wealth — intact. You don’t spook easy.
But when the biggest names in finance start whispering about a 30% correction, even the old bulls start looking for exits.
Morgan Stanley, Deutsche Bank, and Evercore all say we’re dancing on a cliff. Not because of one thing — but because of everything: tariffs, inflation, slowing consumer demand, and a labor market with more holes than a Washington spreadsheet.
Meanwhile, the S&P 500 just snapped a four-day losing streak, rebounding like Wilt Chamberlain on a good night.
It wasn’t exactly conviction buying — more like dip buyers grabbing what was left on the floor after last week’s tariff tantrum and gloomy jobs report.
Big Tech led the charge: Alphabet, Apple, Meta, and Microsoft continued their winning ways, with the latter now clocking its longest rally since 2023 — ten straight weeks in the green.
It’s probably not possible to point out how dangerous this level of concentration in so few stocks on the S&P 500 is enough. The chart shows the contrast in enthusiasm for Big Tech, AI, Big Data… call it what you will… vs. the health and breadth of the real economy. (Source: Topdown Charts)
If you’re interested in pop culture, American Eagle got an unlikely lift, too, thanks to President Trump’s social media endorsement of Sydney Sweeney’s ad campaign for good jeans.
The clothing brand soared after he declared it the “‘HOTTEST’ ad out there.” The rabid attack brigade on social media did not agree.
This isn’t really our beat, but if you’re interested, search Sydney Sweeney’s new “fascist” ad campaign and marvel at the absurdities people will go to hate everything online.
Wall Street Flashes Caution
Not everyone on Wall Street is convinced Big Tech is going to remake the world. Or make investors rich.
Mike Wilson at Morgan Stanley sees consumer and corporate pressure building fast. Julian Emanuel at Evercore is even more bearish. Their forecast: a 10–30% correction in the S&P 500.
And this is before we get into August and September — historically the worst two months of the year for stocks.
Meanwhile, tech and tech-adjacent stocks now make up 55% of total market cap. That’s higher than the Dot-Com Bubble peak in 2000.
If you’re wondering where the crash will start… history suggests you look at where the concentration is thickest.
Musk’s Payout & Palantir’s Pop
Tesla just handed Elon Musk a fresh $30 billion incentive to stay put for another two years. The company says it’s “performance-based,” but given the legal fog still hanging over his 2018 pay package, we’ll file that under “public persuasion.”
Palantir, meanwhile, continues to party like it’s 1999. With shares up over 525% in a year, Chief Technology Officer Shyam Sankar officially became a billionaire. He joins co-founders Peter Thiel, Alex Karp, and Stephen Cohen in the 10-figure club.
Palantir’s controversial defense and AI contracts have driven massive retail demand — making it the third most-bought stock behind only Nvidia and Tesla.
But even Sankar is cashing out. He sold $370 million in shares last year.
When insiders sell into strength, we pay attention. These are tradable events, not long-term endorsements. “Don’t be surprised if shares take a breather here, they’re getting overbought,” notes our Portfolio Director Andrew Packer.
Tech Wealth Mirrors 2000
Speaking of tech wealth: Half of Nvidia’s employees now have a net worth of $25 million. That stat might’ve made sense back when Nortel and Cisco were filling their parking lots with Ferraris. But anyone who lived through the aftermath knows how that ends.
An intriguing presentation on X reveals what happened to investors who bet long-term in the tech darlings – Nortel, Cisco, Lucent – during the dotcom bubble. Spoiler alert: What goes up, must go down. (source: Financelot on X)
One X-thread circulating this week compares Nortel, Cisco, and Lucent pre- and post-dot-com bust.
Spoiler: It didn’t end well. We’re watching for déjà vu in real time, although we may not be there yet.
Tariff Mania Escalates
Trump now threatens India with new “secondary tariffs” for its continued purchases of Russian oil. India called the move “unjustified and unreasonable,” but that’s not slowing the president down.
Meanwhile, tariff revenue is booming: the U.S. took in $29.6 billion in July, an all-time record.
We still have a hard time understanding how more money going into government coffers from taxes is going to make America great again. Make the American government great again (MAGGA)? (Source: U.S. Treasury.)
Annualized, that’s over $310 billion — three times last year’s total. The White House sees it as both a political tool and a fiscal win.
Fed Chair Drama… Again
Trump continues to threaten Jerome Powell’s job, but the courts have made it clear: the Fed chair can’t be fired without cause. Renovation overruns at the Eccles building don’t cut it.
Behind the theatrics, the Fed is dealing with serious internal dissent. Two governors opposed holding rates steady last week — the first multiple dissent since 1993. But Powell is still at the helm, steering through the noise.
Note: Last week, we suggested new members cash out of our inaugural trade, an inverse ETF, in the Grey Swan Trading Fraternity for a 19% gain in 4 days.)
Is This the Most Terrifying Bull Market Ever?
As we noted yesterday, big names are pulling the fire alarm:
- Ray Dalio warns of an “economic heart attack.”
- Michael Burry placed a $98 million short bet on Nvidia.
- Jeremy Grantham expects a 50% collapse.
They’re not warning about recessions. They’re warning about systemic failure.
Jim Rickards called it “the avalanche theory.” When the snowpack is unstable, the snowflake doesn’t matter. The market doesn’t need a reason to fall—just a trigger.
Are we there yet?
~ Addison
P.S.: Grey Swan Live! Join us Thursday August 7 @ 11am with Mark Jeftovic to explore the “most terrifying bull market” in history.
We’ll cover AI, retail market mania, how “crack up booms” work in theory and in practice plus several ways to trade “the quickening” before the next correction hits.
Your thoughts? Please send them here: addison@greyswanfraternity.com
