Goldilocks Tailwinds, AI Capex Check, Shallow Pullbacks

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The recent minor dip in late September 2025 was swiftly absorbed, suggesting it was merely a technical pressure release after an extended run, particularly in the tech sector.

August PCE inflation came in at 2.7%, with Core PCE at 2.9% — both the highest since February but exactly in line with expectations.
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Despite this, the Fed remains on track to cut 50bps by end of the year, supported by higher GDP forecasts and easing inflation trends.

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Crucially, a dovish macroeconomic shift, underscored by easing inflation data and impending rate cuts, promises to provide a significant tailwind for the broader market beyond the current AI leaders.
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It’s a classic “goldilocks” setup of solid growth and cooling prices.

Insights from the Proflex Macro Call

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The "No-Stick Correction" Reality​
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One of the biggest overlooked insights right now is simple: none of the pullbacks are sticking. Liquidity is deep, sentiment is strong, and even a 10% dip would still sit comfortably inside this bull market. Smart money knows this — dips are opportunities, not danger signs.

On the call, we dug into why these “non-sticking” corrections aren’t a fluke but a reflection of how much liquidity is sitting underneath this market.
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This is exactly the kind of thinking we’ll unpack at Proflex Investor Day on October 5th.
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We’ll break down the macro shifts, options frameworks, income and hedging strategies, and the mindset needed to navigate today’s market — all while connecting you with a sharp community of investors.
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​Details:

📅 Sunday, October 5, 2025​
📍 Santana Row, San Jose, CA​
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You can watch recording of the full weekly discussion here:
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Key Drivers This Week

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Macro Tailwinds: Fueling the Next Leg Up

The macro environment is sending a clear message: tailwinds are strong and supportive.
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The recent market recovery was sparked by the latest PCE report, where inflation came in exactly as expected — no negative surprises. This provided much-needed clarity and confidence after weeks of cautious positioning.

With inflation stable and the market pricing in an 88–90% probability of another Fed rate cut in October, policy is clearly moving toward further easing. Short-term rates are falling while long-term yields remain contained, a powerful combination that supports higher equity valuations without stoking fears of runaway inflation.

On top of that, the biggest tariff-related worries haven’t shown up in the inflation data, easing geopolitical pressure. All of this points to a deeply supportive backdrop for U.S. equities, particularly over the medium to long term.
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AI Dominance: The Unstoppable Spending Cycle

The AI rally remains the undisputed "biggest trend" and the primary engine of market growth, being an intergral part of a multi-decade expansion cycle.

The spending forecasts are staggering, indicating "continued spending all the way up to 2030," confirming that this expansion cycle is barely in its middle stages.
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This means the investment window for AI leaders remains wide open, saving US economy from the recessionary pressures seen in Europe and China.
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Divergent Asset Classes: Gold, Metals, Bitcoin & Realty

While equities continue to surge on the back of the AI wave, other asset classes are telling a more divergent story. This “decorrelation” is important — it reveals how capital is repositioning across different parts of the market rather than moving in lockstep.

Gold and Precious Metals have quietly led the charge, with gold tracking money supply growth better than almost any other asset.
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​Sovereign buying and deglobalization trends are driving this strength, and silver’s recent catch-up move signals broad momentum across the precious metals space.

Bitcoin is consolidating sideways, behaving more like “digital gold” than a speculative instrument. Its modeling has become far more stable compared to the volatile altcoin universe, reinforcing its role as a core macro asset rather than a trading frenzy.
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Meanwhile, residential real estate remains under pressure. Even with rate cuts on the horizon, borrowing costs are still historically high, limiting affordability and making a broad housing revival unlikely.
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🧭 Proflex Playbook – Planning, Not Panic, Drives Performance

We are at a critical inflection point where disciplined planning and robust mental models separate real performance from speculative noise. The market is not forgiving of FOMO without a coherent strategy.

Our stance remains clear and decisive:

• Focus on Structural Growth: Continue to overweight the secular AI theme, recognizing its multi-year runway.
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• Anticipate Shallow Corrections: Use dips as accumulation opportunities, not reasons for fear, understanding that "none of the corrections stick."
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• Diversify Thoughtfully: Recognize the "decorrelation" across asset classes; consider gold and Bitcoin for portfolio resilience.
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• Develop Mental Models: Prioritize long-term planning (6-12 months out) over short-term news, aiming for consistent, incremental gains.

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If you're an All-Access or Managed Portfolio subscriber, our positioning has already shifted ahead of this moment—scaling up asymmetric hard asset plays while hedging for earnings volatility and geopolitical tail risks.

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Until next week,

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— The Proflex Team
​ Trusted Macro Insights. Calm Investing. Tactical Trades.

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