# The Market Is Risk-On… But Growth Isn’t (Yet) w/ Market Radar Source: https://www.youtube.com/watch?v=SbGPUnVZZW4 Recap page: https://rapidrecap.app/video/SbGPUnVZZW4 Generated: 2026-02-03T16:10:52.152+00:00 --- ## Quick Overview Market Radar's systematic models indicate the market is currently in a risk-on regime, though the growth index is neutral and showing only promising signs of turning bullish, leading them to be most bullish on the NASDAQ for Q1 due to expected mean reversion and catch-up trade among American mega caps once capital expenditure fears subside. **Key Points:** - The market is in a bullish risk-on regime, but the growth index is neutral, suggesting markets are consolidating growth impulses, which holds back assets like Bitcoin. - The recent ISM manufacturing PMI reading of 52.6 beat estimates of 48.5, marking the biggest beat in four years, but Market Radar emphasizes that such hard data is backward-looking and lacks forward-looking alpha. - Bitcoin functions as a 'release valve for excess liquidity' beyond the stock market and requires strong momentum from a bullish growth index, which is currently lacking, causing its underperformance relative to equities. - Market Radar believes the Fed will remain lax regarding inflation near the 2-3% range because policymakers will not sacrifice trillions in stock market cap to correct inflation by 30 or 50 basis points. - The recent speculative surge in precious metals like gold and silver appears to be a thematic push that disconnected from macro drivers, evidenced by significant recent liquidation (gold dropped almost 21% from peak to trough in futures). - The team's most bullish call with size for Q1 centers on long the NASDAQ, betting that once mega caps like Oracle and Microsoft find bottoms, a significant catch-up trade will propel the indexes much higher. **Context:** Host John Gillan of Milk Road Macro interviews the team from Market Radar, a financial service platform providing data-driven insights and regime-based trading strategies. The discussion centers on interpreting current economic data, such as the recent strong ISM manufacturing PMI beat, within the context of their systematic macro regime models, specifically contrasting the current 'risk-on' environment with the performance of assets like Bitcoin and the recent volatility in commodities like gold and silver. ## Detailed Analysis Market Radar asserts that the current market regime is risk-on, although their proprietary growth index is neutral, indicating a slowdown or consolidation phase, which explains why Bitcoin, a hyper risk-on asset needing momentum, is lagging equities. They caution against relying heavily on backward-looking data like the ISM PMI, noting that in recent years, leading indicators have failed to track actual economic improvements, especially in the service economy which outperforms manufacturing. Regarding inflation, they argue that the Fed will not aggressively hike rates unless inflation becomes significantly problematic, as policymakers are unlikely to crash the stock market for minor adjustments near the 2-3% target. Concerning precious metals, they view the recent speculative activity in gold and silver as a thematic bubble that has recently deflated, with gold suffering a massive liquidation event, suggesting that while underlying macro drivers for metals remain, the speculative mania has been corrected. For positioning, they note that contraction in credit risk is concerning but expect a floor for risk assets if credit risk bottoms out soon. Their primary bullish allocation for Q1 is long the NASDAQ, anticipating that as capex spending fears subside and mega-cap tech components (like Oracle, which is down 50% from highs) find support, a powerful mean reversion and catch-up trade will drive the index significantly higher. ### Economic Indicators Assessment - ISM manufacturing PMI beat of 52.6 is backward-looking; Market Radar focuses on forward-looking growth index which is currently neutral - Services PMI is more relevant than manufacturing as the US is a service economy - Leading indicators showed failure to deliver post-2022 due to AI acceleration wave. ### Market Regime & Asset Performance - Current regime is risk-on with strong inflation impulses; Bitcoin suffers because the neutral growth index means lack of momentum for this 'excess liquidity valve' asset - Equities maintain a bid due to positive inflation index, unlike Bitcoin which needs excess liquidity. ### Inflation Outlook & Fed Policy - Sub 1% inflation prints are unlikely without a dramatic recession; directional impulses from inflation swaps suggest temporary disinflation hiccup - The Fed will remain lax if inflation is near 2-3% as they will not sacrifice trillions in stock market cap to correct minor inflation deviations. ### Precious Metals Analysis - Gold started on macro merit (de-dollarization) but speculative retail involvement, especially Chinese, led to an unsustainable thematic push - Gold saw a massive liquidation event, dropping almost 21% from peak to trough in futures, indicating weakened liquidity. ### Silver Dynamics - Silver acts as a higher beta or leveraged play on gold, attracting more speculators than gold - Its velocity is lower due to the physical nature of buying/selling, allowing euphoric runs that exceed macro fundamentals. ### Q1 Bullish Allocation - The most bullish call with size is long the NASDAQ - This is based on betting that the capex spending fear affecting mega caps like Oracle and Microsoft will end, leading to a mean reversion and catch-up trade that propels the index higher.