Episode summary
Is The Market Hitting Its Breaking Point? | Jesse Felder
Thoughtful Money
· · 1 hr 6 min · Guests: Jesse Felder
Summary
Jesse Felder argues that the market is approaching a point where the “new economy” can no longer offset weakness in the rest of the economy. He says the old economy is effectively in recession already, while AI-related stocks keep carrying the indexes, but that divergence is becoming too extreme to last. He points to weak breadth, record Hindenburg omens, semiconductors that peaked in June, and a closing capital window marked by postponed IPOs and widening CDS spreads as warning signs that the rally is narrowing and vulnerable.
He also ties the macro backdrop to higher yields and tighter credit. Felder says the breakout in the 10-year Treasury yield points toward more upside in rates, which tightens lending and makes it harder for capital-intensive growth stories to keep expanding. At the same time, he sees energy as structurally bullish because years of underinvestment and depleted reserves have set up a supply shortfall, while oil remains cheap versus its long-term history.
On precious metals, Felder is constructive on gold but thinks the key driver is the Fed and real yields. He sees gold as a hedge against policy mistakes, fiscal excess, and eventual monetary intervention, especially if AI, recession, or Treasury-market stress forces the Fed back into aggressive easing. He also likes cash, TIPS, and defensive value stocks as practical places to wait for better entry points.
Key takeaways
- Felder says the old economy is already in recession and the market is close to a point where AI stocks can no longer carry everything.
- He expects higher Treasury yields to tighten lending and worsen pressure on weak sectors, with the 10-year breakout implying more upside in rates.
- He remains bullish energy because years of underinvestment and drained reserves have left oil supply structurally tight through 2027-28.
- He favors gold as protection against inflation, currency weakness, and a future Fed pivot, but does not expect an immediate blowoff top.
- He sees value stocks, especially defensive names and beaten-down brands, as possible beneficiaries if growth leadership rolls over.
- He thinks cash and T-bills offer useful optionality while the market works through a speculative bubble and weaker breadth.
Notable quotes
“the old economy is is essentially in recession”
“the new economy essentially cannot can no longer hold up everything by itself”
“the capital window to me is closing and that should be the biggest red flag”
“we're not going to be anywhere near an end of this energy bull market”
“gold has reflected that. I think really the most, you know, another important thing for the gold price”
How the episode opens
The old economy is is essentially in recession. As Jim Paulson put out a report today, the new economy is doing great. Old economy is in recession.
Um, and that dichotomy can only kind of persist for so long before the the new economy essentially cannot can no longer hold up everything by itself. And I think we're really close to getting to that point. Welcome to Thoughtful Money.
I'm Thoughtful Money founder and your host, Adam Tagert. Welcoming you here for a discussion with the publisher of the Felder Report. I'm talking obviously about Jesse Felder.
Um Jesse, thank you for rejoining us here. It's been a while since you've been on the program. You know, a lot's gone on since the last time you're on the program.
Um, most notably, bond yields have uh continued to rise at a rate that I think has surprised most people. Um, the war between US and Iran has continued. Uh, so keeping oil prices high.
Um, we're really now starting to get to the point where things like the price of diesel are becoming a really big issue. uh that is um impacting consumers inflation expectations uh which are important as we head into a midterm election here in the US in just the next couple of months. Um the AI party continues to rage even though when you look under the hood of the markets while we're near all-time highs on the S&P and the NASDAQ uh there's a lot of companies out there that are actually suffering quite a bit that aren't uh participating in the AI party.
So, um I'm sure there's a lot more going on that I mentioned, but you know, it's a it's an interesting time and I'm curious when I've talked to you in the past, I would say in general, your position has been generally guarded um in terms of your outlook.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai stocks
- market correction
- recession risk
- rising yields inflation
- gold and precious metals
Companies and tickers mentioned
- Thoughtful Money LLC
Watch the episode
Watch “Is The Market Hitting Its Breaking Point? | Jesse Felder” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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