In my view, equity assets represented by the U.S. stock market’s tech “Magnificent Seven” are being priced as a safe-haven asset.

-Just the pure cash and short-term, highly liquid investments held on the books by the top few tech giants already add up to several hundred billion dollars, with funds totaling more than the official foreign exchange reserves of most mid-sized sovereign states.
-Tech giants generate several hundred billion dollars of extremely stable free cash flow every year, and they fundamentally don’t need to frequently go to the market in a high interest rate environment to face the bankruptcy risk from rolling over borrowing like traditional companies or governments.
-Added to that, going long on long-term Treasuries as a hedge has already been proven to be a bad idea in this round of the cycle, because long-term Treasuries will plunge in lockstep with risk assets as expectations for fiscal deficits worsen, causing you to lose the hedging effect.
-In fact, in the current inflation environment, Mag 7 can, at any time, perfectly pass inflation costs on to global consumers through strong pricing power.
-With high-yield coupons along with inflation protection, and supported by unlimited share buybacks, it’s easy to understand why all the funds are rushing into Mag 7—almost identical to the “hold and wait” strategy of adding positions during the crypto bear market, $BTC .