Capital Flows
· Capital Flows
· June 25, 2026 at 01:04
· ⏱ 2 min read
| Read on Substack ↗
Summary
The newsletter argues that an equity rotation from mega-cap tech (Nasdaq, Mag Seven) into small caps (Russell) is underway, driven by curve regimes and liquidity shifts that can be understood through structural mechanics rather than simple macro contraction. For markets, this suggests potential continued divergence between Russell and Nasdaq, and that flattening yield curves may not signal tightening liquidity, challenging conventional macro narratives.
•The article explains why the Russell can rally while the Nasdaq and Mag Seven sell off and bonds bid on the same day, illustrating non-uniform market action.
•A flattening yield curve does not necessarily mean macro liquidity is contracting — the author distinguishes genuine liquidity shifts from mere rotation.
•The S&P 500 can be decomposed into earnings, valuations, and a handful of names that now drive the entire index, highlighting extreme concentration.
•Tomorrow's livestream will analyze how the largest credit instrument built on Bitcoin is reflexively driving downside price action via forced selling at compressed MNAV.