Group 1 - The core investment theme on Wall Street is the BIG combination, which includes Bonds, International stocks, and Gold [1] - The strategy of going long on the BIG combination using a barbell approach can help mitigate market volatility caused by the AI bubble [1] Group 2 - Bonds are regaining their status as a risk-hedging tool as nominal GDP growth peaks, with 5-year U.S. Treasury yields approaching 3% and 30-year yields nearing 4% [2] - The end of the "ABB" theme (anything but bonds) is favorable for small-cap stocks sensitive to bonds, which currently have a rolling return rate of -4% relative to large-cap stocks, close to a century low [2] - International assets are expected to benefit from a weaker dollar, the end of deflation in the EU and Japan, and the conclusion of excessive fiscal expansion in the EU and Asian economies [2] - Chinese tech stocks are identified as the optimal choice for hedging against the U.S. AI bubble within the barbell strategy [2] - Gold serves as a hedge against risks of anarchy and dollar depreciation, with its price expected to continue rising despite transitioning from a low-key to a high-profile bull market [2]

Group 1 - The core investment theme on Wall Street is the "BIG" combination, which includes Bonds, International Stocks, and Gold [1] - A barbell strategy of going long on BIG can help mitigate market volatility caused by the AI bubble [1] Group 2 - Bonds are regaining their status as a risk-hedging tool as nominal GDP growth peaks, with 5-year U.S. Treasury yields approaching 3% and 30-year yields nearing 4% [2] - The end of the "ABB" theme (anything but bonds) is favorable for small-cap stocks sensitive to bonds, which currently have a rolling return rate of -4% relative to large-cap stocks, close to a century low [2] - International assets are expected to benefit from a weaker dollar, the end of deflation in the EU and Japan, and the conclusion of excessive fiscal expansion in the EU and Asian economies, with Chinese tech stocks being the optimal choice for hedging against the U.S. AI bubble [2] - Gold serves as a hedge against risks of anarchy and dollar depreciation, with its price expected to continue rising despite transitioning from a "quiet increase" to a "strong rise" [2]

Core Viewpoint - The performance of U.S. stocks and risk assets is closely tied to three key indicators: broker stocks, bank stocks, and Bitcoin, which will serve as signals for market direction [1][10]. Group 1: Market Indicators - Broker stocks, bank stocks, and Bitcoin are identified as the best indicators for market trends, with a double top pattern signaling a bearish outlook and a clean upward breakout indicating a bullish outlook [1]. - The S&P 500 index recorded its best May performance since 1990, surging 6%, while the 30-year Treasury bond saw an increase following recommendations to invest in "humiliated" assets [1][10]. Group 2: Dollar and Economic Sentiment - In contrast to the rally in risk assets, the dollar is struggling to gain traction, leading to speculation about a potential bear market for the dollar [3]. - The weak dollar is viewed as a tool to revitalize U.S. manufacturing, which currently accounts for only 8% of U.S. jobs, potentially leading to a bear market for the dollar and a bull market for gold, emerging markets, and international assets [6]. Group 3: Investment Strategies - Bearish investors are positioning themselves defensively by allocating to healthcare, consumer staples, and utility stocks, which currently represent only 18% of the S&P 500, the lowest level since 2000 [5]. - Bullish investors are employing a barbell strategy by going long on the "Magnificent Seven" tech stocks and value stocks from other regions to hedge against potential market bubbles and risks from excessive EU fiscal spending [8]. Group 4: Fund Flows and Market Dynamics - Recent fund flow data indicates a divergence in market sentiment, with cryptocurrencies seeing a significant inflow of $2.6 billion, the largest weekly inflow since January [10]. - Despite the bullish outlook for the "Magnificent Seven," historical data suggests that market bubbles typically peak at a P/E ratio of 58x and a 244% increase, indicating that there may still be 30% upside potential [10]. Group 5: Historical Context - The current market environment is reminiscent of past asset bubbles, with 12 out of the last 14 bubbles accompanied by rising bond yields, and the 30-year real interest rate nearing its highest level since November 2008 [11].