A Lot Happened Wednesday.

Four stories landed Wednesday. None of them were small.

1 CPI came in hot on the headline. Cooler under the surface.
2 Bank of America said 70% of its bear market signals are flashing.
3 Goldman says parts of the market are now more expensive than the dot-com peak.
4 Crypto is bleeding.

And SpaceX prices on Friday.

So yes. A lot is happening.

Here’s the story. ⇩

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Story 1 · CPI

Annual inflation hit 4.2%. That is the hottest reading in three years.

Normally, that would be the headline. But Wall Street focused on something else.

Core CPI rose 0.2% month over month.

Economists expected 0.3%.

One tenth of a percentage point.

That was enough for futures to breathe again.

Energy did most of the damage. Core inflation did not.

And for the Fed, that distinction is important.

The report was not exactly good.

It was just not bad enough to ruin Friday.

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Story 2 · The warning

Bank of America just flashed 7 of 10 bear market signals. The last time the dispersion in tech was this wide was February 2000.

Seven of Bank of America’s ten bear market signposts have been triggered.

Five flashed red by April.
Two more in May.

1 Speculation Is Winning
High P/E stocks are outperforming low P/E stocks by the widest margin in years.
Translation? Investors are paying up for stories and growth again.
BofA calls it a sign of excessive speculation.

2 Tech Is Starting To Look Like 2000
The gap between the best and worst performing tech stocks is now the widest since February 2000.

That’s dot-com era territory. Not every tech stock is participating.A handful are carrying the party.

3 Expectations Are Sky High
BofA says long-term growth expectations have reached levels where stocks become more vulnerable to disappointment.

The higher the expectations… The less room there is for mistakes.

4 AI Is Eating The Cash Flow
Hyperscalers are expected to spend nearly 100% of their operating cash flow on capital expenditures by year-end.

In short: The AI buildout is consuming almost every dollar these companies generate.

The most interesting warning?

Tech dispersion is now the widest since February 2000.

That does not mean this is 2000.

But anytime the chart starts rhyming with the dot-com era.

Again, that is not a prediction of doom. It is a strategist saying the risk/reward has deteriorated.

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Story 3 · The valuation that broke records

We broke the dot-com record. Investors are paying up… way up.

Goldman Sachs flagged one of the wildest numbers of the week.

Roughly 40% of U.S. market cap now trades above 10x EV/sales.

The dot-com peak was about 35%.

We passed it.

EV/sales sounds technical, but the idea is simple.
At 10x sales, investors are paying $10 for every $1 of revenue.

That can work but only if revenue grows fast enough to justify the price.

Revenue now has a job:
Grow into the valuation. OR watch the valuation come back to reality.

That is not bearish, just math.

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Story 4 · The unexpected victim

Will crypto became the funding currency?

Bitcoin is down about 52% from its October high.

Crypto ETFs saw more than $2 billion in outflows in May.

And SpaceX may be part of the reason.

The IPO is expected to raise $75 billion.
Up to $22.5 billion could be set aside for retail investors.

That money has to come from somewhere.

For some investors, the easiest thing to sell is crypto.

1. Sell Bitcoin → 2. Raise cash → 3. Buy SpaceX

That is the rotation. And it may not end Friday.

OpenAI and Anthropic are still waiting behind it.

Every major AI IPO becomes another test of where investor money comes from.

Right now, some of it appears to be coming from crypto.

Bear Signals Are Flashing.

The market is at peak historical valuation — expensive on 17 of 20 metrics, breaking dot-com records on EV/sales, with 70% of BofA’s bear signals flashing.

Inflation is a three-year high. Crypto is bleeding.

And SpaceX prices on Friday.

The biggest IPO in history is coming, but the market’s biggest questions aren’t going anywhere.

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