Sonali Basak

Chief Investment Strategist for iCapital. Previously anchor @BloombergTV. @NYUStern MBA. Views are my own.

[Sonali Basak @sonalibasak]

NEWS: I’m joining @icapitalnetwork at Chief Investment Strategist.

I’m excited to ramp up the dialogue. The job starts Sept. 2.

https://t.co/T6tS8Hbl9H

[Stephanie Link @Stephanie_Link]

Interesting stat on the consumer: In June lower income HH saw wage growth accelerate to 4.1% - highest since July 2023. Lower income wage growth exceeded the 3.4% growth rate recorded by the middle income HH.

[Sonali Basak @sonalibasak]

Summer books are here ☀️

[Joe Weisenthal @TheStalwart]

Really good piece on the AI writing discourse. The vast majority of professional writing is not about "self expression" or "creativity" or whatnot. And then when you add in all the random emails or texts that people have to send, more and more people will just have the AI do it.

[Sonali Basak @sonalibasak]

To be clear, I think Warsh’s commitment to manage the balance sheet lower is a sincere one. I do not see the Fed buying risk assets, particularly not equities, though the 2020 central bank decision to backstop the market with a announcement that it would be capable of buying corporate bonds, junk debt & ETFs certainly pushed major bond investors to fly into the riskier debt markets (like JNK) in a swift and rapid manner.

Yet the commitment to manage the balance sheet draws the question: What happens if we have a prolonged drawdown? What’s the fix? Would the Fed not need to step in, in some manner, if rates end up going to zero — then what’s the ultimate fix?

In my view, this is the open question.

As for @EricBalchunas’s thought provoking piece, I do agree that the stock market is too big to fail. It’s the engine that powers a meaningful portion of America’s capital, without it there would be stalled investment in future growth and a chill through the ability to spend on everything from capex to jobs. There’s an entire generation that hasn’t been able to build home equity, and have therefore relied on equity markets for wealth creation.

Yet in prior drawdowns — and I don’t think there needs to be an immediate one by any means — the Fed’s liquidity support mechanisms largely targeting the bond market also set off a risk rally in stocks that year. Just the idea of a backstop has kept the Fed put alive for decades. Without it, is there a heightened era of volatility ahead?

[Meltem Demirors @Melt_Dem]

1/ "physical AI" is about much more than robots.

the real opportunity is representing the physical world with information.

once reality can be measured, it can be modeled.

once it can be modeled, it can be priced, optimized, financed, and traded.

new research drop 👇

[Brian Armstrong @brian_armstrong]

Finally, the web has native monetization. Ads were not the only way.

[Sonali Basak @sonalibasak]

This is a must read.

via @EricBalchunas

[Michael Dell 🇺🇸 @MichaelDell]

🎯

[FedResearch @FedResearch]

When term premiums go up, banks lend MORE. We formalize this in a dynamic bank portfolio model & test it using the 2013 Taper Tantrum. Finding: QE's term premium compression may dampen bank lending, working against monetary policy stimulus goals. https://t.co/LHv4obrSmR

[Squawk Box @SquawkCNBC]

"This is not really a ceasefire," Goldman Sachs' @JaredCohen says about Iran. "At best it's a pause or a holding pattern." https://t.co/v7imOfsLzU

[Daily Chartbook @dailychartbook]

"The Silicon Data LLM Token Expenditure Index, which blends token price and usage, is ... down almost 20% from a high in May after nearly doubling since its inception in December."

-Bloomberg

[Kevin Gordon @KevRGordon]

ISM Services PMI a bit softer in June but generally healthy across the board … business activity still expanding, prices paid less hot, employment back in expansion

[Sonali Basak @sonalibasak]

@Markg6078 2 cups of coffee before 9 am today!! Shaking off the long-weekend laziness that would otherwise set in...

[Sonali Basak @sonalibasak]

MOMENTUM UNWINDING: The momentum factor tracked by Bloomberg dropped 3.3% last week, as we saw mega-trades tied to semis and other AI-related beneficiaries begin to trade down. Largely, it's expected that momentum will unwind further. It's one reason you see quant funds having their worst two-week run since 2023.

It's not to say that momentum can't come back. It's just that there are bids in other factors (like quality) that are worth watching.

[Sonali Basak @sonalibasak]

INTEREST RATE WATCH: The 10-year yield is 20 bps off the 2026 heights, a far more meaningful drop than we're seeing at the shorter end of the yield curve and spurring a relative flatting of the curve (remember investors entered the year loaded up on steepeners).

What does this reflect? Breakevens for 2-years and 10-years have meaningfully subsided, showing inflation expectations have come into check. Term premiums have also cooled. Decent foundation for a 10-year that's been quite sticky. We still think we have a meaningful trading range of 4-4.8% -- but as long as we stay under 4.5%, conditions could remain quite easy.

[Sonali Basak @sonalibasak]

THE HUMAN ELEMENT: There’s been a lot of bell ringing about how AI will impact jobs, but probably not enough said about how there’s a human element that many people rely on — judgement, decision making, empathy, things that are meaningful inputs for financial careers, scientific breakthroughs & creative endeavors.

Loved this recent conversation with @cvpayne - find the full interview here (where you can also find our views for 2H 2026): https://t.co/WgyMzsvStL

[Danielle DiMartino Booth @DiMartinoBooth]

“June also marked another record shift: for the first time in more than two years, the typical for-sale home spent no more time on the market than it did a year earlier, 53 days.”

https://t.co/V8xqRXms6w

[Sonali Basak @sonalibasak]

THE AMERICAN DREAM: My father grew up in a clay hut in Bangladesh, then worked & finished school in the US through days and nights through college so our family would have a meaningful life here. The mobility he was able to achieve allowed me to get through school & grad school, and pursue now multiple careers of my dreams.

I believe the dream is something we should all protect. And I feel extraordinarily lucky to have grown up in this country. Wishing you a day of reflection & togetherness.

Happy 4th of July 🇺🇸🇺🇸🇺🇸