[Long-Term Bonds Have Sounded the Alarm; the Real Risk May Still Lie Ahead]

Global long-term bond yields continue to surge.

But history tells us that high interest rates do not mean US stocks will immediately plunge.

Long-term bond yields were already very high in 2006—2007, yet US stocks continued rising and hit new highs.

The real problems came later.

High interest rates persist for too long

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Rising financing costs

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Real estate and subprime lending become the first to buckle

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Credit markets deteriorate

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Deleveraging

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Ultimately evolving into a financial crisis.

In 2007, real estate was the first sector to run into trouble.

This time, I am paying closer attention to AI capital expenditures and the memory cycle.

Large amounts of capital are now flowing into data centers, GPUs, HBM, SSDs, optical communications, and power.

The next focus is earnings reports.

MSFT, META, GOOGL, and AMZN for AI CapEx.

NVDA, AMD, and AVGO for orders.

MU and SK hynix for HBM.

SNDK and WDC for NAND and enterprise-grade SSDs.

Changes in institutional positioning should also be included in our observations.

If large macro funds begin significantly reducing their positions in memory and high-beta AI stocks while long-term bond yields continue to rise, this signal cannot be understood merely as ordinary profit-taking.

The truly dangerous scenario is when several signals appear at the same time:

Long-term bonds continue to rise

Tech giants cut CapEx

GPU orders slow down

HBM and SSD demand weakens

Large institutions continue reducing their AI positions.

If only bonds fall, that is an alarm.

If earnings reports begin to weaken, that is confirmation.

If problems emerge in the credit markets again, the nature of the situation will truly change.

In plain English:

For now, borrowing is simply becoming increasingly expensive.

As long as companies can still make money, the market can continue to hold up.

What truly requires caution is when money remains this expensive while big money starts pulling out, AI companies begin spending less, and chips and memory products become harder to sell.

In 2007, real estate was the first sector to buckle.

This time, keep an eye on AI and memory.

The alarm has already sounded.

Next, we will see where the smoke appears first.