According to The Kobeissi Letter, US households are currently experiencing financial strain due to lower asset prices and ongoing inflation. At the end of 2024, US households held a record 29% of their financial assets in stocks, which have since suffered declines. This situation poses significant challenges for traders as market volatility increases and consumer spending is likely to be impacted. Investors should remain vigilant about the potential for further inflationary pressures and adjust their portfolios accordingly.

According to The Kobeissi Letter, a record 54% of financial assets are now allocated to US stocks, a level nearly double that of 2008. This indicates a strong bullish sentiment in equity markets, with equity allocation surpassing the peak seen during the 2001 Dot-Com bubble. Meanwhile, investments in debt have fallen to a record low of 18%, highlighting a significant shift in asset allocation strategies. This could suggest increased confidence in equity performance and potential volatility in debt markets.