Renaissance Macro's deGraaf: 'Some fissures' present in market but majority of signals are bullish

Market Outlook - The current market sentiment is more bullish than bearish, with approximately 65-70% leaning towards positive trends [2] - There is a notable disconnect between different analysts regarding consumer resilience and housing market performance [3][4] - The fourth quarter will be crucial in determining whether cyclical stocks can continue to outperform defensive stocks [6] Concerns and Observations - There are concerns regarding the performance of publicly traded data centers and their relation to AI infrastructure [8] - Private equity firms are showing signs of weakness, particularly those with higher credit exposure [9][10] - The high yield issuance in September reached about $53 billion, marking one of the largest issuances, which may lead to increased credit spread concerns [10][11] Commodities and Alternative Investments - Gold has shown strong performance, indicating a potential diversification away from the dollar, with foreign central banks less inclined to repatriate gold [13][14] - Bitcoin has also experienced impressive strength recently, suggesting a bullish trend, although it is noted that Bitcoin and gold are not directly comparable despite some philosophical similarities [15][16] Employment and Technology Investment - There is a potential conflict between strong tech investment and weak employment, raising societal concerns [17][18] - The market currently assumes that all companies in the AI space will succeed, which may not be realistic, indicating a risk of unforeseen losers in the sector [19] - Discretionary spending remains strong, but any decline could elevate bearish scenarios [20]