Woofun AI reports that Bank of America Securities Chief Strategist Hartnett outlined three specific conditions triggering a "full-scale hedge" in US equities this summer: Mag7 ETF falling below $60, USD/JPY dropping below 110, and the yield curve inverting again. While these thresholds have not yet been breached, warning signals are accumulating. U.S. stock funds have seen $8.5 billion in net outflows, the first since March, following a historic $119.2 billion inflow.

Hartnett notes that the ongoing underperformance of mega-cap cloud stocks compared to chip stocks is pushing the sustainability of AI capital spending to the core of the market debate: Apple raising MacBook prices, Microsoft increasing Xbox prices, both directly related to rising memory costs; Vera Rubin rack memory prices have cumulatively risen by 435%, and Goldman Sachs predicts that AI capital spending could reach as high as $14 trillion by 2027. Funds in U.S. stocks have shifted early, with liquidity flowing out of tech giants and into cyclical assets such as semiconductors, mid-caps, housing, and REITs, seen by the market as a preemptive move anticipating a shift in policy focus towards "affordability." He maintains that gold below $4000 still holds strong allocation value, longing the long end of the U.S. Treasury market is currently the most counter-cyclical long-term trade; Since Fed Chair Powell took office on May 22nd, U.S. Treasuries have risen by 3.2%, outperforming stocks, which have fallen by 1.6%, indicating a clear bond market leadership.