Weekly Commentary: Canary?

2025-09-27 04:45:26 ET

It might have been subtle, but it was reminiscent of early April. During Tuesday and Wednesday trading, KKR's stock suffered a 6.1% drop - the largest two-day downdraft since April 10/11. Fellow "private-Credit" players Apollo fell 4.7%, Blackstone 4.1%, and Ares Management 7.6%. AI behemoth Nvidia suffered a 3.6% drop, correlation with the "private-Credit" stocks that recalled April's market swoon. Oracle dropped 6.0% and the MAG7 index declined 1.3% over two sessions.

For the week, KKR sank 10.0%, Ares Management 7.6%, Blackstone 6.6%, and Apollo 4.7% - for the most part, the largest weekly declines since April's "liberation day" losses. Leveraged loan prices slipped 0.15% this week, the largest weekly decline since late July (week ended 8/1) - and ended the week at the lowest level since June 29th.

Nvidia sank 14.6% during April 3rd and 4th market mayhem, as KKR cratered 23.3%, Apollo 23.2%, Blackstone 15.3%, and Areas 23.6%. Markets were in near panic. A fledgling bout of de-risking/deleveraging was at the cusp of wreaking bloody havoc, starting with the piercing of tightly intertwined AI and "private-Credit" Bubbles. But President Trump backed down. His tariff "pause" triggered a powerful short-squeeze and reversal of hedges, a liquidity onslaught that unleashed FOMO, manic speculative excess, and a major shot in the arm for AI and "private-Credit" excess. Bubble inflation went into high gear....

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