Crypto squeezed. Jobs stalled. The Fed tiebreaker.

Transcript

Tom Crypto's ripping, jobs just face-planted, and private credit is leaking billions—all on a Friday. This is your pre-Weekend Edition mashup.

Marie Good morning, it's Friday, July third, the New York Edition of Investment Flash. I'm Marie, with Tom and Gerald.

Gerald Alright, let's start with the private credit story—it's bleeding. Blue Owl investors want out.

Marie Blue Owl Capital—that's $4.7 billion in redemption requests from their flagship funds.

Tom And across 20 funds tracked by the Financial Times, it's $22 billion. That's not a drip, that's a flood.

Gerald Right, and Apollo can't offload a Hispanic grocery chain because immigration raids crushed sales. That's a portfolio exit problem no one saw coming.

Marie Gerald, your Apollo short from yesterday's London show—remember the sell call? That's aging well.

Tom Ha! Yeah, Gerald, your short is printing. Apollo Global down 19 percent year to date.

Gerald Look, I'm not gloating, but this is what happens when liquidity meets reality. Private credit was the bulletproof trade, and now it's showing cracks.

Marie But here's the thing—nobody's connecting this to the broader credit cycle. $22 billion in redemptions and high-yield spreads aren't even blinking yet? That's the real warning.

Tom So you're saying the next domino is high-yield? If forced sales hit, that could get ugly.

Gerald Exactly. And that's why the dispersion trade our view flagged—long bonds, long volatility—makes so much sense. But we'll get there. Tom, you've got something brighter: Japan.

Tom Yes! Japan's industrial revival. A $2.3 trillion investment plan to rekindle 'animal spirits.' Fanuc, Yaskawa Electric, Toyota—these names are moving. The Nikkei's buzzing.

Gerald Animal spirits? Sounds like a lot of roaring and not much biting. Yaskawa Electric is trading at a price-to-earnings ratio of about fifty. Fifty.

Marie Ha! Fifty times for a robot maker—I'm sorry, last I checked they aren't making gold bars.

Tom Ha! That's brutal. But it is growth! Yaskawa's new factory uses one-third AI-powered robots. They're betting on regaining share in a 40 percent global market. Fanuc's up 13 percent year to date.

Gerald Alright, buddy, but you know what? Toyota at 11 times forward earnings—that's the value play. Hydrogen combustion engines, cheap clean energy. And it's down 20 percent year to date, offering a decent entry.

Marie I'm going to push back on both of you. The Japan trade is a yen trade. The hedged equity ETF is up 20 percent year to date mostly because of the weak yen, not the industrial plan. If the yen strengthens, those hedges hurt.

Tom Fair point, Marie, but the momentum is undeniable. The Nikkei is near its fifty-two week high, and this stimulus could be the catalyst.

Gerald To be fair, Marie's right about the currency, but I also like Kawasaki Heavy—down 29 percent from its high, involved in both AI robotics and hydrogen. That's a decent bargain.

Marie Okay, but let's not forget the broader macro. We've got crypto squeezing, tech puts blowing out. The whole risk spectrum is flashing.

Tom Speaking of crypto—Bitcoin pushed toward $62,000, $281 million in shorts liquidated. Ether up almost 10 percent, solana 19 percent on the week. My Bitcoin buy from yesterday? Up nicely.

Gerald Tom, I've heard 'cycle bottom' more times than I've heard my own name. The Bitcoin ETF is still down 33 percent year to date. That's a dead cat bounce, mate.

Tom But the Bitwise take today—most original—says the STRC selloff signals a cycle bottom, not a breaking point. And Securitize tokenized $295 million on Solana and Avalanche. Adoption is real.

Marie Calling the bottom on crypto again—that's, what, the fourth this year? But the tokenization story is interesting. It's infrastructure, not just hype.

Gerald The problem is, this crypto pop looks like a textbook short squeeze, not organic demand. When the shorts are done covering, then what?

Tom Then we see if institutions step in. Bitwise argues they will. But Gerald, you love pointing out risks, so what about tech puts?

Marie Oh, the tech puts. Put/call ratio for tech stocks just hit its widest since 2008. The semiconductor ETF down 4.5 percent last session. Tom, your AI momentum is cracking.

Tom No, that's extreme fear, and it's often a contrarian buy signal. The semiconductor ETF is still up 58 percent year to date. This could be the panic before the rip.

Gerald Tom, remember last quarter when you said semis were over? Now you're telling me 58 percent year to date isn't enough to be cautious?

Tom Ha! That's fair—but I've learned my lesson. Contrarian indicators sometimes work.

Gerald Or it could be the start of a proper unwind after a monster run. If the AI trade rolls over, it'll drag everything—including your crypto bounce.

Marie And then there's the jobs report: only 57,000 jobs added in June. That's catastrophic. The Fed is now forced into a dovish corner.

Tom So long bonds? The iShares long-term Treasury ETF at its fifty-two week low. That's a screaming buy if yields drop.

Gerald I'll take that all day. But here's the kicker: the volatility futures ETF near its fifty-two week low. Volatility is priced for a world that no longer exists. If credit stress spills over, vol pops.

Marie But Tom, if earnings start to fall, rate cuts won't save stocks. The dovish pivot helps bonds, not necessarily equities.

Tom Fair, but that's why the dispersion trade works: you buy bonds and vol, short credit. Equities are a wildcard.

Marie Our view really captured it perfectly. The dispersion trade: long bonds, long volatility, short corporate credit. Bet on a regime change nobody's ready for.

Tom Exactly.

Gerald One hundred percent.

Marie That's the whole story.

Tom Quick hit: Canada and the Philippines finalizing a free trade deal. Defense ties, energy cooperation. The aerospace and defense ETF could get a bump. Philippine equities, down 3 percent year to date, have room.

Gerald The Canada equities ETF near its high—limited upside. But yeah, Philippine equities offer better value, 14 percent below fifty-two week high.

Marie Alright, let's land it. The market is pricing two very different futures: easy money propping up risk, or late-cycle leverage snapping. The cleanest expression is the disconnect between equities complacency and credit's early warning.

Tom So watch credit, watch volatility. And if you're just finding us, hit follow on Spotify—or check investmentflash.com for the full digest with charts and sources. We're back tomorrow morning at ten a.m. London time for the Weekend Edition.

Marie And as always, none of this is investment advice. Thanks for listening.

Gerald See you tomorrow, gang.