Market liquidity appears to be declining. The G10 Excess Liquidity Leading Indicator has turned negative for the first time since 2024. This metric compares the rate of money supply growth across G10 economies with the pace of economic growth. When the money supply grows faster than the economy, there is excess liquidity that can support asset prices. Historically, this gauge has led the performance of the semiconductor index, SOX, by roughly 6 months. If this historical relationship holds, it points to weaker semiconductor stock performance over the coming months. Keep watching liquidity.(The Kobeissi Letter)