The Technical Backdrop: When Flows Meet a Hawkish Fed

Market flows point higher into July due to mechanical factors like options expiration clearing and pension rebalancing, but Fed Chair Kevin Warsh's hawkish stance on potential rate hikes creates an underlying risk. While seasonal tailwinds and record retail/passive flows support equities, concentration in mega-cap tech stocks and elevated leverage pose risks if sentiment shifts. The article recommends staying invested with discipline while maintaining defensive positions and cash buffers.