Technology stocks, cryptocurrencies, gold, and even the bond market—there is no corner that is safe.

"Bitcoin falls below $93,700, wiping out this year's gains!" "Spot gold drops over 2% in a single day, falling below $4,100!" "The Nasdaq continues to decline, with technology stocks under pressure!"

Last week's global market seemed to stage a synchronized dive, with multiple asset classes, from cryptocurrencies to U.S. tech stocks, from gold to government bonds, rarely declining simultaneously. This synchronicity rendered traditional safe-haven strategies ineffective, leading investors to wonder: where is the money flowing? What is the market worried about?

I. Simultaneous Asset Decline: Both Risk and Safe-Haven Assets Suffer

Last week, the global market witnessed a rare scene—risk assets and traditional safe-haven assets declined simultaneously.

• The cryptocurrency market was hit hardest, with Bitcoin briefly falling to $93,778.6, completely erasing its gains since the beginning of the year. This drop triggered massive liquidations, with over 150,000 people liquidated in the global cryptocurrency market within 24 hours.

• Meanwhile, U.S. tech stocks also faced significant pressure. Although the Nasdaq rose slightly by 0.13% last Friday, this merely reversed the previous three-day decline. Investor sentiment in tech stocks remains cautious, with ongoing concerns about the overvaluation of AI concept stocks.

• Even more surprisingly, traditional safe-haven assets like gold and U.S. Treasuries also declined simultaneously. Spot gold fell over 2% last Friday, dropping below the $4,100 mark; meanwhile, yields on U.S. Treasuries across all maturities rose, with the 10-year Treasury yield reported at 4.148%, an increase of about 2.9 basis points. The simultaneous decline of risk and safe-haven assets breaks the traditional asset allocation logic.

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II. U.S. Treasuries Face Sell-Off: A Market Signal of Rising Yields

• The latest developments in the U.S. Treasury market are particularly noteworthy. Not only did the 10-year Treasury yield rise to 4.148%, but the 2-year and 30-year Treasury yields also increased to 3.606% and 4.749%, respectively. This comprehensive rise in the yield curve sends a clear market signal: funds are not flooding into U.S. Treasuries, the traditional safe haven.
• The rise in Treasury yields is driven by a sharp change in market expectations regarding Federal Reserve interest rate cuts. Following a series of hawkish comments from Federal Reserve officials, the probability of a rate cut in December has fallen below 50%, now at only 44.4%, while the probability of maintaining the current rate has risen to 55.6%.
• This change is significant—just a month ago, the market expected a 95% chance of a rate cut in December.
• The cautious stance of Federal Reserve officials, combined with a data vacuum, has exacerbated market uncertainty. Some officials are concerned about making decisions in a "data blind flight," and after the end of the U.S. government shutdown, a large amount of delayed economic data will be released, including key indicators like the non-farm payroll report.

III. Safe-Haven Assets Fail: Why Have Gold and Treasuries Lost Their Safe Haven Function?

• The simultaneous decline of gold and Treasuries has drawn deep market attention. Historical data shows that during crises, asset correlations tend to approach 1.0, as investors sell profitable assets to cover losses. This phenomenon is similar to the scenarios during the 2008 financial crisis and the early stages of the 2020 pandemic.
• Michael Ambruster, co-founder of futures brokerage Altavest, pointed out: "In the short term, as investors seek liquidity, gold may fluctuate in sync with other risk assets."
• Adrian Ash, head of research at BullionVault, further explained that in a "real crisis," the correlation of all assets tends to approach 1.0 because "traders losing on one type of asset need to liquidate profitable positions to raise cash."
• This is precisely why gold fell during the most severe phase of the 2008 market crash and also saw a significant drop at the onset of the COVID-19 panic in 2020. This time, Treasuries were not spared either; rising yields mean falling bond prices, indicating that Treasuries also faced selling pressure.

IV. The Mystery of Fund Flows: Defensive Stance and Regional Rotation

• In this global market volatility, fund flows have shown a complex situation. Risk assets have experienced capital outflows, but traditional safe-haven assets have not become clear beneficiaries. The cryptocurrency market has continued a large-scale deleveraging process that began on October 10, with the market facing overall position adjustment pressure.
• At the same time, U.S. tech stocks are also facing capital outflows. Bridgewater's third-quarter portfolio adjustments significantly reduced tech stock holdings, with its position in Nvidia dropping from 7.23 million shares at the end of the second quarter to 2.51 million shares, a decrease of 65.3%.
• In contrast, Bridgewater significantly increased its holdings in U.S. large-cap ETFs, with SPY holdings surging by 75.3% to 4.05 million shares, raising its portfolio proportion to 10.62%, making it its largest holding. Within tech stocks, funds are also being reallocated. Berkshire accelerated its sale of Apple shares in the third quarter while building a position in Google's parent company Alphabet, spending $4.3 billion to acquire 17.85 million shares.
• Regionally, Asian markets showed mixed performance. Japan's Nikkei 225 and Topix indices both fell by 0.6%, while South Korea's KOSPI index rebounded strongly, rising by 1.7%, mainly driven by significant gains in chip manufacturers SK Hynix and Samsung Electronics.

V. Key Data and Investment Strategies

• In the coming week, the market will focus on delayed economic data releases. The U.S. Bureau of Labor Statistics has confirmed that it will release the long-delayed September non-farm payroll report on November 20, followed by the release of September real wage data on November 21. These data will be key references for the Federal Reserve's December monetary policy decisions.

• The intensive speeches from Federal Reserve officials will also influence market expectations. Core officials such as Williams, Kashkari, Goolsbee, and Logan will speak, potentially further shaking interest rate expectations.
• For the cryptocurrency market, Bitunix analysts pointed out: "The core of the current market is not Beta returns, but pricing chaos in a macro information vacuum." "BTC is currently in a monthly structural correction phase, and the market is unlikely to have a clear direction before a large amount of delayed data returns."

The long-term value of gold and Treasuries may still exist. Adrian Ash noted that after the market crash in 2008 and the initial drop during the 2020 pandemic, gold "bottomed out earlier than the stock market, rebounded more strongly, continued its long-term upward trend, and reduced overall portfolio losses."

As the U.S. delayed data is released this week, including the September non-farm report, the market may find a new direction. But until then, no one can confidently say the storm has passed. What investors can do is perhaps remain cautious and wait for the fog to clear.

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