Recently, when looking at the US stock market, there's always been an illusion: the S&P 500 appears unmoving as if nothing happened, but if you look inside, the bottom is already a mess.

Morgan Stanley's Chief Strategist Mike Wilson recently issued a warning: the financial environment is quietly tightening, but this wave of impact has been absorbed by a handful of AI giants, while most ordinary stocks are silently enduring the pain of "cutting losses."

What exactly happened? Let's set aside obscure jargon and talk about this rare "internal tear."

|Beneath the surface: Financial conditions have quietly "pulled the dam"

On the surface, the stock market appears calm and uneventful. But in reality, the real "water pump" was already in motion.

How tight is the current financial environment? Morgan Stanley's composite financial conditions index has jumped to about 1.4 standard deviations.

What does this mean? The last time there was such a tightening was in 2022, when the Fed aggressively raised rates by 75 basis points.

The current pressure comes from the "three mountains":

1. U.S. Treasury yields surge: The 10-year Treasury yield broke through 5.3%, with real yields rising sharply.

2. Dollar strengthening: Rising to a new high for this cycle.

3. High Oil Prices: The Shadow of Inflation Lingers.

Simply put, money has become more expensive and liquidity has decreased. Although the index looks decent, the underlying liquidity is already "passing through a crisis."

| Huge Crack: AI Giants "Banding Together," Ordinary Stocks "Bleeding"

The cost of this tightening was not shared equally.

The market is extremely fragmented now: on one side, a handful of AI giants are propping up the index; on the other, thousands of ordinary stocks are falling.

数据不会撒谎：

等权重指数落后：过去六个月，标普500等权重指数（代表普通股票）跑输了市值加权指数6%。

中位数惨不忍睹：标普500成分股的中位数股价，距离52周高点已经回落了15%。这是互联网泡沫破裂以来最差的读数。

这就像一场宴会，主桌的几位大佬（AI巨头）还在推杯换盏，但大厅里的其他客人（普通股票）已经被账单压得喘不过气了。

|Valuation or Growth? A debate about "life and death."

The biggest disagreement now is: is this merely a valuation adjustment, or a sign of an economic recession?

Mike Wilson is still relatively optimistic, believing this is a "valuation shock" that has not yet hit the "fundamental growth root." His reasoning was firm:

However, Goldman Sachs poured cold water on the situation.

They worry that the wave of stock lock-up periods in 2027 may bring a huge supply shock. In other words, when the time comes, selling demands may flood in like a flood.

Kingtech Perspective | In this "fragmented" market, what should we do?

Faced with such a "distorted index" market, blind optimism or panic are unacceptable.

1. Keep a close eye on the "barometer": financial stocks

Financial stocks are the most important reference indicators for the recent stock market direction. If bank stocks stabilize, it means the market can still hold up; If financial stocks continue to break down, one should be cautious of the risk of the index "catching up" downward.

2. Focus on the "convergence" direction

This extreme differentiation cannot last forever. There are only two paths in the future: either ordinary stocks catch up with the index after catching up, or the index falls to accommodate ordinary stocks. Given that the equity risk premium has fallen below zero (historically rare) and supply pressure is looming, I must remain highly vigilant about the risk of "index convergence downward."

3. Investment Strategy: Distinguish truth from falsehood, embrace certainty

At this stage, don't blindly trust the index.

The current market is like walking a tightrope—it looks steady, but in reality, it's full of wind underfoot. Protect your principal and wait for the real direction to become clear.