In this episode:
After weeks of warning signals, a sharp correction has arrived, concentrated in the most crowded trades:

• The Momentum factor is down 25% from its highs and Bitcoin has erased all year-to-date gains, while market liquidity dries up and investors are forced to cut exposure rapidly.
• Volatility is not driven by panic but by excess leverage: systematic funds were fully invested, retail investors heavily exposed through ETFs and derivatives, and asset manager cash levels at twenty-year lows.
• The core issue is AI: the main driver of US growth and S&P 500 performance, now under scrutiny for its dependence on credit, sustainability of cash flows and “circular financing”; Nvidia’s latest figures fuel concerns that the cycle may be entering a more mature and fragile phase.
• The global economy is running at different speeds: Europe remains weak with Germany stuck in structural stagnation, while in the US the strong aggregate demand masks a “K-shaped” divide between high-income consumers and households with shrinking savings.
• Despite tensions, earnings season is solid with 15% year-on-year growth and broader sector participation: a setup that favors healthier rotations and a market less dependent on a handful of names.

In this transition phase, prudence and resilience remain essential, but the correction is creating new opportunities: volatility can become a chance to build positions in a market that is finally broader and more balanced. For more insights, listen to the latest episode of the podcast hosted by Alberto Tocchio, Head of Global Equity and Thematics.