Stocks continue to soar. Last week, the Nasdaq 100 touched a record. The S&P 500 nearly inked its 16th new high for the year.
Tech giant Apple, a laggard for 2025, posted its best week since 2020, soaring 13% after Tim Cook made nice with President Trump in the Oval Office — gold-and-glass statue in hand.
On paper, it’s smooth flying. But check the gauges: The S&P has the highest sales multiple in history, 3.15x:
The S&P 500 P/E ratios have reached a lofty altitude where a sudden downdraft can turn serene skies into stomach-dropping turbulence.
We have beaten our skepticism in this market to death, including the record number of retail buyers amid record insider selling.
Here’s one more stat to factor in:
The risk basket of stocks that are prone to disruption from AI technology has significantly widened since May of 2025. (source: Bloomberg)
But why start the week on a down note?
The average bear market lasts just over a year. The average bull, almost six. Averages, however, don’t save you when the seatbelt light flashes. (Source: Barcharts)
If you’re a “buy the dip” type, you may get your chance to own some good companies on the cheap very soon.
AI: The Economy’s Steroid
Massive AI infrastructure spending is giving the economy the kind of artificial boost you’d expect from a “nepo baby”’s monthly wire from Mom and Dad.
Economist Paul Kedrosky’s math shows Big Tech’s data center spree contributed 1.3% of last quarter’s 3% GDP growth — more than consumer spending did.
Meta, Alphabet, Microsoft, and Amazon poured $69 billion into AI hardware and facilities in just three months, and could spend $320 billion this year. That’s already a bigger GDP share than telecom and internet investment at the peak of the dot-com bubble.
Chipmakers like Nvidia and AMD are cashing in. So are utilities supplying the power and landowners in data center hubs like Northern Virginia.
But if AI doesn’t deliver the promised productivity leap, this “Great Data Center Buildout” could be like 19th-century railroads or Pets.com — impressive on paper but overbuilt for demand.
The Golden Age of Mining
Gold and silver joined last week’s rally not because they got a photo op with the president but because the math works. With energy costs low, mining margins are fat.
Metals stay elevated each day, producers pocket outsized profits, and investors are finally noticing.
Tavi Costa on X calls it a “Golden Age of Mining.” What is the difference from the 95% of Wall Street stocks? Miners are producing actual cash flow, not just riding index-record headlines.
Chips, Deals, and Trump’s New Export Playbook
Tim Cook wasn’t even Trump’s most consequential guest last Wednesday. Nvidia CEO Jensen Huang offered to give the U.S. government 15% of AI chip revenue from China sales in exchange for export licenses. Two days later, the Commerce Department signed off. AMD secured similar terms.
After months of re-cutting import deals, Trump’s now experimenting with revenue-sharing on exports.
It’s trade policy as transactional as a poker table — and just as unpredictable.
In the auto space, carmakers have absorbed new tariff costs, so far. But analysts expect sticker shock early next year. Global auto tariffs have already inflicted $12 billion in losses, the worst since COVID. Volvo’s chief calls it “regionalization.” Really, it’s survival.
The Price of Everything vs. The Wage of Not Enough
Meanwhile, in the real economy, it is “insane” how prices of U.S. consumer goods and services have risen this century.
Over the weekend on X, Global Markets Investor posted these price changes since January 2000 to June 2025:
Hospital Services +271%
College Tuition and Fees +194%
College textbooks +181%
Childcare and Nursery School +152%
Medical Care Services +144%
Housing +108%
Food and Beverages +103%
Meanwhile, average wages have been relatively stagnant at just over 100% increase over the same period, barely enough to keep pace with average inflation of 90% since the turn of the millennium.
“Without owning assets that outrun inflation, climbing the career ladder at speed, or building your enterprise,” advises GMI. You’ll likely have a hard time keeping up…
Household Debt: The Quiet Crisis
One consequence, U.S. household debt hit $18.39 trillion last quarter, up $185 billion.
Serious delinquencies on credit cards are at a 14-year high; student loans, a 15-year high.
Student loan delinquencies have spiked since Trump recalled the Biden-era dictum that you don’t have to pay back the money you borrowed to throw ragers in your dorm room. (source: Global Markets Investor)
That’s before counting Buy Now, Pay Later.
The helium in the markets belies the crisis at the kitchen table. And a critical affordability crisis in the housing market:
The median household income necessary to purchase the median-priced home for sale in the U.S. ($124k) is now 57% higher than the current median household income ($79k). This is the most unaffordable housing market in history. (Source: Charlie Billelo, X)
Trump’s Guillotine Stump
Another head rolled this week. IRS Commissioner Billy Long was removed less than two months into the job. He’s Trump’s sixth IRS chief this year. Treasury Secretary Scott Bessent will fill in.
Long says he’s headed to Iceland — as ambassador.
Heh.
As we get into the markets this week, these off-hand events caught our eye, for no particular reason:
Bed Bath & Beyond is back with a Nashville store that honors expired 20% coupons.
AOL, meanwhile, will finally kill off dial-up on September 30. Somewhere, a modem is preparing its final scream. And yet, nostalgia’s pull is strong, especially in retail stocks.
To extend Friday’s metaphor: markets may look stable, but remain cautious. There’s likely more “handover turbulence” ahead. The captain’s still making deals mid-flight, the cargo is shifting, and the route keeps changing.
~ Addison
P.S. On Grey Swan Live! last week, Mark Jeftovic covered the rapid acceleration in tech innovation contributing to “the most terrifying bull market” in history. Click here if you’re a paid-up member of Grey Swan Investment Fraternity; you can review Mark’s advice for positioning your portfolio during Trump’s Great Reset.
Mr. Jeftovic, a Canadian, and the American president have something in common. With remarkable foresight, in 2013, Mark converted the operating capital of his core business, EasyDNS, into bitcoin. A decade later, Trump’s media company behind Truth Social raised $2 billion in fiat U.S. dollars to do the same thing… buy bitcoin.
A special note to Grey Swan subscribers: This week’s Grey Swan Live! will be held on Friday at 11 AM, not Thursday. We’re in the middle of some new groundbreaking research – and will have even more details that afternoon. But our paid-up Fraternity members will get an early sneak peek at what we see developing.
For now, mark your calendar:
Sneak Peek Grey Swan Live!
Friday, August 15, 2025
11am ET
Your thoughts? Please send them here: addison@greyswanfraternity.com
