The Bond Market "Mind Virus" | Jared Dillian on why Debt Crisis

Watch on YouTube ↗  |  September 03, 2026 at 13:10  |  32:21  |  Monetary Matters
Speakers
Jared Dillian — Editor, The Daily Dirtnap
Jack Farley — Host, Monetary Matters

Summary

Jared Dillian argues that the bond selloff is a sentiment-driven 'mind virus' and that long-dated Treasuries are an incredible deal. In equities, his top-50 S&P chart review shows semis, healthcare, and financials topping, while Intel and Oracle look like they are bottoming. He also lays out a cautiously bullish gold view, dislikes copper, warns AI is a debt-financed bubble, and says private credit and private equity have not bottomed. He promotes an equal-weight multi-asset portfolio to cut volatility and drawdowns.

  • Bond bear market seen as excessive deficit and inflation sentiment; weak economic data supports long bonds.
  • Dillian moved a large portion into long bonds for three to five years and calls 4.7% 10-year and 5.2-5.3% 30-year yields attractive.
  • Top-50 S&P chart review points to financials and broker-dealers, healthcare, and semiconductors topping.
  • Intel and Oracle appear to be bottoming on the charts.
  • Gold is cautiously bullish on labor-market weakness; copper is his least favorite metal.
  • AI is viewed as a bubble because tech capex is unusually funded with debt at high coupons.
  • Private credit and private equity unwind is seen as slow and not yet bottomed.
  • The Awesome Portfolio uses equal-weight stocks, bonds, gold, cash, and real estate to reduce drawdowns.
Ideas
Jared Dillian Editor, The Daily Dirtnap 3:00
Long-dated Treasuries are an incredible deal.
The bond bear market is a sentiment-driven 'mind virus': inflation is falling and economic data such as payrolls, JOLTS, and PMI are deteriorating, while the $2 trillion deficit is only about 6% of GDP versus 12% in 2010. Everyone measures bond supply but ignores demand; a risk-off event would send money into bonds. He has moved a large share of his own money into long bonds as a three-to-five-year hold and calls 5.2-5.3% on 30s and 4.7% on 10s an incredible deal.
10-Year U.S. Treasury TLT HIGH
Jared Dillian Editor, The Daily Dirtnap 8:42
Semiconductors are topping on growth deceleration.
He sees semiconductor charts as topping and is waiting for Nvidia's second derivative of growth to slow from 70% toward 50-60%, which he says is when these stocks top. Retail investors are heavily concentrated in names like Nvidia and Broadcom, while hedge funds have been crowded long semis.
SMH AMD NVDA MED
Jared Dillian Editor, The Daily Dirtnap 8:42
Financials and broker-dealers are topping.
His top-50 S&P chart review shows financials topping, with broker-dealers looking worst. JP Morgan was a pretty good short, and Goldman Sachs, Morgan Stanley, and Wells Fargo all look like they are topping.
MS GS JPM WFC HIGH
Jared Dillian Editor, The Daily Dirtnap 9:04
Healthcare and JNJ are topping.
His chart work indicates healthcare is topping, and Johnson & Johnson is called out as a topping healthcare name.
XLV JNJ MED
Jared Dillian Editor, The Daily Dirtnap 9:18
Intel and Oracle are bottoming.
In the same top-50 S&P chart review, Intel and Oracle look like they are bottoming even though more charts are rolling over than basing.
ORCL INTC MED
Jared Dillian Editor, The Daily Dirtnap 17:27
Copper is least favorite metal.
Copper is his least favorite metal: AI-driven sentiment is hot, the chart is stretched in the upper right, and recent price action has been ugly. He would much rather own gold, silver, and platinum than copper.
COPPER MED
Jared Dillian Editor, The Daily Dirtnap 18:03
Gold cautiously bullish on weakening labor.
Gold rallied 15% in a month and then broke back below its 200-day after Jackson Hole; he doubts the amateur technical call for a retest to 4,000 and is cautiously bullish, especially because deteriorating payrolls will make the Fed dovish and support gold.
GLD MED
Jared Dillian Editor, The Daily Dirtnap 23:49
AI is a debt-financed bubble.
He believes AI is a bubble because this is the first cycle he has seen tech financed with debt rather than equity, at roughly 6% coupons, for assets that become obsolete in about three years. That leverage dynamic is distinct from the dot-com bubble and creates downside risk for AI/tech.
AI/technology sector HIGH
Jared Dillian Editor, The Daily Dirtnap 25:38
Equal-weight multi-asset cuts volatility and drawdowns.
He advocates replacing a 100% S&P 500 index-fund portfolio with an equal-weight mix of stocks, bonds, gold, cash, and real estate. Historically this gives up only one to two percentage points of return but cuts volatility roughly in half, with a worst drawdown around 12% versus about 40% for the S&P 500.
Equal-weight multi-asset portfolio (stocks/bonds/gold/cash/real estate) MED
Jared Dillian Editor, The Daily Dirtnap 29:16
Private credit and PE still bearish.
He remains bearish on private credit and private equity: private-market unwinds lack liquidity, portfolio companies are being held rather than sold, and the bear market has not found a bottom. He sees this as connected to the AI unwind.
BIZD PSP MED
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This Monetary Matters video, published September 03, 2026, features Jared Dillian discussing 10-Year U.S. Treasury, TLT, SMH, AMD, NVDA, MS, GS, JPM, WFC, XLV, JNJ, ORCL, INTC, COPPER, GLD, AI/technology sector, Equal-weight multi-asset portfolio (stocks/bonds/gold/cash/real estate), BIZD, PSP. 10 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Jared Dillian  · Tickers: 10-Year U.S. Treasury, TLT, SMH, AMD, NVDA, MS, GS, JPM, WFC, XLV, JNJ, ORCL, INTC, COPPER, GLD, AI/technology sector, Equal-weight multi-asset portfolio (stocks/bonds/gold/cash/real estate), BIZD, PSP