Feb 10, 2026

Email 1: “Need to Know: Why the bond market is at risk from a stock market slowdowns”

Summary: Bank of America strategists warn that slowing stock market gains could reduce portfolio rebalancing flows that have driven significant bond demand since 2021. This slowdown could lessen one of the most reliable drivers of bond demand going forward, creating risks for duration assets amid moderating equity returns, rising capital expenditure, and policy uncertainty. However, a fading rebalancing effect may improve traditional diversification benefits between stocks and bonds. Recent market data shows mixed performance with slight declines in major stock indexes and rising gold prices.

Key points:

– Stock market gains fueled large inflows to bonds via balanced portfolio rebalancing.

– Expected moderation in equity returns and limited Fed rate cuts may reduce rebalancing flows in 2026.

– Reduced flows could increase bond/equity diversification benefits, reversing recent correlation trends.

– The market is closely watching economic reports and earnings.

– Major stock tickers include Nvidia, Tesla, Amazon, Microsoft, and others.

Email 2: “Axios Pro Rata: Evergreen evolutions”

Summary: Private equity secondaries have grown substantially with over $200 billion in transaction volume last year and growing dry powder. Around 25% of secondaries buyers now use evergreen funds, marking a structural shift driven by factors including frequent NAV reporting and improved liquidity. Evergreen funds raise capital regularly and offer liquidity with notice periods, differing structurally from traditional closed-end funds. These vehicles suit repeatable, low-volatility deals, while closed-end funds handle larger, complex transactions. The edition also covers Uber’s acquisition of Getir’s Turkey food delivery business, various venture capital and private equity deals, and public offerings.

Key points:

– Evergreen secondary funds represent a new structural trend expanding beyond retail distribution platforms.

– Capital is committed to standing pools with subscription cycles, providing liquidity on notice.

– Evergreen funds are not fundless sponsors; they differ mainly structurally from closed-end funds.

– Uber paid $335 million to acquire Getir’s Turkish food delivery arm, investing an additional $100 million for a stake in groceries and retail.

– Multiple VC rounds and private equity deals are highlighted, including SambaNova’s $350 million raise and Bain Capital’s $1.28 billion MBO.

Email 3: “Money Stuff: Predicting the Big Games”

Summary: The Super Bowl highlights the rise of prediction markets, such as Kalshi and Polymarket, which offer novel sports gambling experiences and are federally regulated, thereby bypassing many state restrictions. These markets allow betting on diverse events beyond sports, appeal to younger bettors by accepting 18-year-olds, and operate peer-to-peer. They face challenges like ambiguity in event resolution, exemplified by a recent dispute regarding Cardi B’s halftime show participation. Additionally, the newsletter discusses the growing AI ad presence during the Super Bowl, recent cryptocurrency volatility with Bitcoin’s decline, Tether’s evolving compliance efforts including freezing illicit assets, and new challenges posed by AI advancements on corporate auditing fees. The piece also explores exotic prediction market contracts such as bets on the Messiah’s return and the implications of market manipulation.

Key points:

– Prediction markets offer broader event betting and appeal to younger demographics due to federal regulations.

– Resolution ambiguity can lead to disputes unique to prediction markets compared to traditional sportsbooks.

– AI advertising is prominent, reflecting the growing consumer-facing role of AI tech despite its enormous development costs.

– Bitcoin has declined sharply, possibly due to boredom and the emergence of other speculative markets like prediction markets.

– Tether continues to improve transparency and works with regulators to combat illicit activities.

– AI’s impact on auditing is evident as firms like KPMG negotiate fee cuts citing AI efficiencies.

– Exotic event contracts reveal risks of manipulation and complex derivative structures in prediction markets.

Stay Well!