AI-Bitcoin-Private Credit Trifecta Could Upend Markets, Leuthold Warns

Leuthold Group warns that the convergence of AI, bitcoin and private credit forms a largely underappreciated market threat, signaling higher volatility and potential cross-asset stress as these themes intertwine. The firm has cut its tech exposure and shifted toward financials and healthcare, favoring big banks (JPM, Morgan Stanley), biotech/pharma, and gold miners, while steering clear of regional banks and consumer lenders. They also flag a crypto-financing link that could spark liquidity issues if bitcoin prices slide, with yield-curve dynamics seen as a tailwind for banks.