Global Dominant Cycle Watch | Jan 21
Late-Cycle Signals Are Flashing: Risk Assets Under Pressure as Cycle Extremes Build
Wall Street returned from the Martin Luther King holiday under heavy pressure. Risk appetite faded quickly as equities, crypto assets and high‑beta segments moved decisively lower. The S&P 500 and Nasdaq fell sharply, at times more than two percent, while volatility picked up noticeably.
What initially looked like a slow and cautious start deteriorated throughout the session. Rising global bond yields, renewed political uncertainty and valuation concerns—particularly in large‑cap technology—triggered broad selling into the close. The VIX moved back toward the 20 area, signaling a clear shift away from complacency.
Corporate earnings delivered mixed signals. United Airlines reported results slightly above expectations, but weak cash flow limited upside. Netflix posted solid headline numbers, yet a softer forward outlook pushed the stock sharply lower after hours, underscoring how sensitive markets remain to any sign of slowing growth.
Sector performance was highly fragmented. Semiconductors, select energy and materials stocks showed relative resilience, while mega‑cap technology names such as Apple, Nvidia and Tesla suffered pronounced losses. Banks benefited from solid earnings and cost discipline. The broader message from strategists was clear: the AI honeymoon phase is fading.
In macro markets, global bond yields continued to rise. Japanese 10‑year yields reached levels not seen since the late 1990s, while U.S. Treasury yields broke higher from their multi‑month range. Commodities remained strong, with gold and silver at new highs and U.S. natural gas surging on extreme cold weather.
Dominant Global Time Cycles – Cycle Extremes in Focus
The following cycle analysis is based on a daily evaluation of approximately 60 global core assets, including major equity indices, sectors and futures markets. Each asset is assigned a cycle rating indicating the probability of a cyclical turning point. Values above +6 or below ‑6 identify potential candidates for meaningful reversals.
