Welcome back to Hitting the Bid Weekly!

Last week's price action started as a tug-of-war between inflation, geopolitics, and positioning. Then positive momentum eventually took over. The S&P 500 $SPY ( ▲ 0.31% ) and Russell 2000 $IWM ( ▲ 0.25% ) continued to grind higher for much of the week, while the Nasdaq $QQQ ( ▲ 0.97% ) extended its recent surge. Investors started Thursday focused on the latest PCE inflation report, which showed headline PCE rising 3.8% year over year and core PCE rising 3.3% year over year. While inflation remains well above the Fed's target, the report largely came in line with expectations. Treasury yields initially moved lower as investors avoided a hotter-than-expected surprise, helping support equities into month-end.

Another major catalyst arrived Thursday morning after reports surfaced that the U.S. and Iran were making progress toward a potential agreement tied to regional tensions and shipping access. The headlines sent equities higher while crude oil sold off sharply on expectations of reduced supply disruptions and a potential reopening of key trade routes. Oil weakness, however, proved temporary as prices rebounded Monday amid continued uncertainty around negotiations and renewed geopolitical risks.

Looking ahead, markets will focus on JOLTS Job Openings, ISM Manufacturing and Services PMIs, and Friday's jobs report. On the earnings front, CrowdStrike, Broadcom, and Lululemon headline a lighter but still important calendar as investors continue to evaluate whether economic growth can remain resilient while inflation sticks around.

Key market moves this past week:

Not an exhaustive list — just a few I’m watching closely for potential market impact.

Broadcom $AVGO ( ▲ 1.72% ) reports fiscal Q2 earnings after the bell Wednesday. The stock closed at a new all-time high Monday near $460, Wall Street is expecting a beat, and options are pricing roughly a 10% move in either direction. That last part matters. This is not a low-risk setup.

Revenue consensus sits at roughly $22 billion, up 47% year over year, with AI semiconductor revenue specifically guided to $10.7 billion, approximately 140% year-over-year growth. Those are not rounding errors.

The Broadcom AI story is quieter than NVDA's but arguably just as important. While Nvidia dominates the GPU narrative for model training, Broadcom builds custom AI accelerators, or XPUs, that hyperscalers like Google and newer clients like Anthropic and OpenAI use to run inference at scale. AI chip revenue grew 106% year over year last quarter. Management has already telegraphed a target of $100 billion or more in AI chip revenue by 2027. They have beaten estimates in each of the last nine consecutive quarters.

The stock has already broken out of a month-long consolidation, and with earnings this week, the event risk is too high for a pre-earnings trade for me. I'll be watching the reaction to guidance. If price continues to surge higher after earnings, I'll move on. But if the stock falls back into the range, I may look to play the failed breakout.

There's a 62-year-old dental lab technician in South Korea who checks stock prices on his phone every spare moment at work.

His house is mortgaged. His daughter is studying cello in Germany. But the KOSPI is breaking records, and everyone around him seems to be making money. So he borrowed more to get in.

He's not alone. Margin loan balances held by investors aged 50 and older at South Korea's top brokerages more than doubled year over year, now accounting for over 60% of the country's $18.5 billion total margin balance. This is the generation traditionally known for fixed deposits and real estate. Now they're leveraging up to chase a rally.

Is this a market top signal? Not necessarily. No one can call that. But when the most conservative cohort starts borrowing to keep up, that's a sentiment data point worth noting. The crowd is leaning. Hard. MarketWatch reports there are roughly 105 million active trading accounts in a country with a population of just 51 million.

Here's what's actually interesting though.

Financial leverage is just the version of this we have clean language for. We understand it as debt. We know how margin calls work. But the same mechanic runs through everything.

We borrow against ourselves all the time. We just don't call it debt.

Sleep debt looks like the hour you shave off each night to get more done. One hour feels negligible. You barely notice it on day one. But it stacks. And unlike financial debt, sleep debt doesn't announce a balance due. It just quietly degrades the quality of everything else. Your patience shortens. Your decisions get sloppier. Your output looks the same on the surface but costs more to produce. You're not running on less sleep. You're running on borrowed energy, and the interest is coming out of everything that matters.

Physical debt looks like skipping the recovery day because you're on a streak. Pushing through the signal your body is sending because the calendar says you should be fine. The interest compounds quietly. It shows up as a nagging injury, a week of flat output, or a month of dreading something you used to love.

Professional debt looks like running a playbook that stopped working six months ago because you've already invested too much to abandon it. The sunk cost keeps you in the position. You keep adding to a losing trade, convinced the thesis is still intact, borrowing future capacity against a strategy the data already rejected. Eventually the position closes itself.

Relationship debt might be the quietest one. The presence account keeps getting debited through short answers, distracted conversations, and postponed plans, without deposits to match. It doesn't announce itself. It just accumulates until someone notices the balance is gone.

The fear driving that technician in Seoul is the same one that keeps most of us overextended. It's not greed. It's the fear of being left behind while everyone else is gaining ground.

That fear is worth recognizing. Because it's usually when we take on the most leverage, in markets and in life.

The rally might keep going. But you still have to be able to make the payment when it doesn't.

Like what you’re reading?
Forward this to a friend or share the newsletter link to help grow the HtB community.

Hitting the Bid content is for informational and entertainment purposes only. The information contained is not, nor is it intended to be, trading or investment advice or a recommendation of any security, futures contract, digital asset or alike. I may hold a position in the trading vehicles discussed. Trading and investing contains risk. All investors should evaluate their own risk tolerance, financial situation, and investment duration before entering any trade or investment.