Nov 7, 2026 · 1h 56m
Market sell-off tests the case for bonds and discipline
More Market Bloodshed To Come? | Michael Lebowitz
The discussion connects a technology-led equity decline to rates, liquidity, credit conditions, and the portfolio choices that matter when volatility spreads.
- 1The sell-off looks technically damaging, but Michael Leibowitz sees insufficient fundamental deterioration to confirm a lasting bear market.
- 2Higher rates may weaken future growth and inflation expectations, potentially pushing long-term Treasury yields lower despite near-term policy pressure.
- 3Bonds, carefully selected municipal debt, and disciplined rebalancing can support financial goals without requiring investors to chase every market rally.
Don't miss
Leibowitz explains why investors may use intermediate Treasuries as a stabilizing foundation rather than chase maximum annual returns.
The brief
Adam Taggart and Michael Leibowitz examine a technology-led sell-off driven by hedge-fund unwinds and margin calls, asking whether it signals an AI bubble bursting or a technical reset.
Leibowitz argues that earnings and fundamentals have not materially deteriorated, while weak breadth and the S&P 500's 200-day moving average show why the market remains vulnerable.
The rate discussion turns counterintuitive: further Federal Reserve tightening could weaken future growth and inflation expectations enough to pull long-term Treasury yields lower.
Rather than panic, Leibowitz describes selective technology exposure, bond allocations, municipal-bond due diligence, and credit spreads as tools for navigating uncertainty.
The closing exchange broadens the definition of success beyond returns, linking financial planning to relationships, purpose, health, and work that fits personal strengths.
What was said on this episode
37 statements · 18 positive · 14 negative · 2 mixed · 3 neutral
Markets will generally rise through the rest of the year
“Generally, I do think we trend upward through the rest of the year.”
Listen at 1:00
Next year poses greater market risk than the next few months
“I'm more worried about next year than the next couple months.”
Listen at 1:17
A hedge fund may have failed or faced forced margin covering
“a hedge fund. went belly up or was forced to cover margin.”
Listen at 4:10
AI data centers will continue being built because they are valuable
“we're going to have data centers they're far too valuable”
Listen at 5:38
Current data-center construction cannot satisfy demand quickly enough
“They can't build them fast enough as is.”
Listen at 7:27
Evidence for an AI-bubble crash remains limited; the decline looks technical
“there's very little evidence and all this kind of the way it all happened around the election and and just leads me to believe that this was a technical issue”
Listen at 9:17
The Nasdaq decline represents consolidation rather than necessarily a correction
“it's not necessarily a correction, it's a consolidation.”
Listen at 15:04
Major hyperscalers can sustain AI investment using non-AI earnings
“these companies, these hyperscalers, they're making so much money outside of AI. They can support this.”
Listen at 16:13
Calling a top in the AI trend is currently premature
“When you want to call the top on that, Right now, it seems a little premature.”
Listen at 16:29
Broad market selling could signal a regime change
“if it's selling off where it's all the whole market selling off, that may start to tell us that there's a regime change”
Listen at 19:49
Recent rate increases will have larger economic effects next year
“Next year is when the interest rate increases we've had over the last five months start having a bigger and bigger impact.”
Listen at 21:31
Reacting immediately to expected events can be dangerous for investors
“it can be very dangerous to react to it”
Listen at 24:20
Beaten-down technology stocks offered a favorable return skew
“the skew of returns at last night seemed much more positive.”
Listen at 27:46
One strong monthly jobs report does not establish a labor-market trend
“One month does not make a trend.”
Listen at 29:31
The labor market is currently stagnant with little hiring or firing
“right now it's a very stagnant labor market. No hire, no fire”
Listen at 30:35
The Federal Reserve will likely raise rates at its next meeting
“I suspect they will hike”
Listen at 32:06
Continued Federal Reserve hikes could push bond prices higher
“if the Fed keeps hiking, bonds could keep rising.”
Listen at 33:48
Long-term bonds have reacted positively to recent Federal Reserve hikes
“my bet is that and we've seen it already that bond, the long run has really reacted positively to the last Fed hike”
Listen at 33:52
Treasury prices may have bottomed while yields may have peaked
“I think we may have bottomed in price, topped in yield”
Listen at 38:02
Higher borrowing yields eventually create conditions for lower yields
“higher yields beget lower yields.”
Listen at 39:16
Investors should consider adding exposure to bonds yielding above 5%
“Why not add or at least have some exposure to bonds that pay five, five plus percent?”
Listen at 42:04
“If yields go up to about 610, 620 in one year, you're break even.”
Listen at 45:45
A five-year bond could return about 9% if yields fall to 4%
“If yields drop to 4%, you'll get your 5% coupon and you'll make 4, 4.5%, you'll make, call it 9%.”
Listen at 45:57
Six-percent yields could eventually lead to four-percent yields
“So 6% begets 4%.”
Listen at 46:35
Bonds offer a reasonable probability of decent returns for part of a portfolio
“it makes a lot of sense for someone to, you know, for someone that wants part of their portfolio to just be. you know, a nice, solid, not going to say no lose bet, but decent probability of earning a decent return.”
Listen at 47:59
Seven- to eight-percent yields would indicate severe economic problems
“if yields keep going to seven, eight percent, we got much bigger problems.”
Listen at 51:23
Holding the bond to maturity produces a 5% annual return
“If you hold it to maturity, you're going to make five percent a year.”
Listen at 51:51
Municipal bonds can offer additional yield over Treasuries
“you can pick up additional yield over treasuries just like corporates.”
Listen at 54:35
Municipal bonds are less liquid than corporate bonds and Treasuries
“there's a little bit of illiquidity in municipal bonds.”
Listen at 55:09
CCC-rated corporate debt is showing more concerning stress
“what is a little more disturbing is triple c”
Listen at 1:00:27
Financial markets are beginning to show mild liquidity stress
“you're starting to see just a little bit of a liquidity squeeze”
Listen at 1:06:22
Municipal bonds offer opportunities but require careful selection
“municipals, there are opportunities here, but just know what you're buying.”
Listen at 1:11:53
Tax benefits can raise municipal bonds’ effective yield to roughly 5–5.5%
“when you factor out the tax benefit, it gets you to five, five and a half, whatever the yield may be.”
Listen at 1:12:08
The market was technically oversold and due for a bounce
“The market got very oversold yesterday, due for a technical bounce.”
Listen at 1:19:09
The S&P 500 should remain above its 200-day moving average
“we really want to stay above the 200 day moving average.”
Listen at 1:21:06
Rotating toward undervalued sectors and away from overvalued ones helps portfolio management
“shifting your portfolio towards what looks to be undervalued and getting it out of things that are overvalued has been very helpful”
Listen at 1:24:09
Most political campaign promises are not implemented
“Most often, none of it gets done.”
Listen at 1:41:57
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
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