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The Regime Shift Is Here: TACO Hope Turns To Inflation Reality

Published on March 29, 2026

Jordi Visser

In this week’s video, I lay out why this was the week investors finally shook off their tariff PTSD and started pricing in a fundamentally different market regime. The war continues, oil is spiking and monthly nimport prices for capital goods just hit the highest level on record back to 1988. Inflation is likely heading to 4–6% as crude’s six-month rate of change feeds directly into CPI. Meanwhile, the S&P is down close to 10% off highs, the Nasdaq had its worst week since liberation week, and the global 60/40 portfolio is on pace for its worst month since 2022.

But this is not a recession story, it’s a rotation story. Six of eleven S&P sectors are up for the year. The big weights that have led since 2007 are down; the smaller, commodity-linked, hardware-oriented names are up. Growth is being rerated as AI software disruption accelerates, the credit cycle turns, and long-duration assets get repriced. Hyperscalers are breaking down technically. Microsoft just closed below its 200-week moving average for the first time since 2013, and the S&P software index since 2010. Private credit stress continues with defaults accelerating, redemptions surging, and withdrawal caps spreading across major funds.

The structural thesis remains: AI capex is a trillion-dollar-plus boom that overrides the noise, but the alpha is migrating to hardware, commodities, energy, and materials. The growth-vs-value regime shift mirrors the 2007 commodity super-cycle, except this one is driven by AI. Edge AI developments like Google’s TurboQuant compression paper add a new wrinkle, shifting inference from cloud to local devices, which pressures hyperscaler ROIC assumptions further. Meanwhile, Micron trades at 3.8x 2027 earnings after beating by 30%, and silver is the offensive position I’m adding to now.

Timestamps

(00:00–02:12) Regime shift: Investors finally moving past tariff PTSD; the environment since 2007 is over. Long scarcity, short abundance is the framework.
(02:13–05:12) Structural forces: AI software disruption is real and spreading; labor disruption worsening with zero job creation over the past year; commodities in a bull market; credit cycle in a confirmed downturn.
(05:13–06:56) S&P sector positioning problem: Tech, discretionary, and financials make up 50%+ of the index but are on the wrong side of this regime; 6 of 11 sectors are up YTD, this is rotation, not a bear market.
(06:57–09:22) Model portfolio: 98 thematic names focused on hardware, chemicals, semiconductors, optical fiber, energy infrastructure. Up 75% over the past year; equal-weighted, skewing mid and small cap.
(09:55–12:06) Inflation incoming: Import prices surging on computers, peripherals, and semiconductors. Oil’s 6-month rate of change implies 4–6% CPI. Capital goods import prices highest on record since 1988.
(12:07–16:01) Geopolitical risk: Iran invasion probability above 50% by April 30; Strait of Hormuz disruption risk; Asia-wide energy shortages spreading; Shell CEO warning of Europe next. If inflation hits 6%, S&P could fall 25% off highs.
(16:17–19:30) Market technicals & rates: PE compression underway; 2-year yields could approach 5%; high yield CDX blew out Friday; MOVE index approaching liberation day levels.
(19:31–21:13) 60/40 breakdown: Worst month since 2022 for global 60/40. Bonds, stocks, crypto, privates, and alts all declining simultaneously.
(21:14–23:32) Growth vs. value regime shift: S&P relative to commodities mirrors 2007 iPhone-era reversal. Growth underperformance vs. value could persist for years. Hyperscalers are software companies and face the same disruption risk.
(28:04–30:55) Deleveraging signals: Turbulence model flagged since Feb 3; Russell outperforming Nasdaq by 4% in a week; put-call ratio hasn’t spiked enough for a sustainable bottom; VIX outside Bollinger band suggests short-term bounce early next week.
(32:55–36:45) Hyperscaler breakdown: Microsoft down 27% YTD with a near-40% drawdown; Meta, Amazon, Google all in steep declines. Oracle CDS blowing out. Software index at 15-year relative lows.
(37:12–39:59) Private credit crisis deepening: Monthly losses, withdrawal caps at Apollo, UBS halted real estate fund withdrawals, Blue Owl concerns, banks now offering hedge funds ways to short private credit.
(40:17–45:49) AI demand still massive: Rental rates spiking; TurboQuant compression paper from Google raises edge AI bear case for cloud capex, but near-term memory demand unchanged. Micron at 3.8x 2027 PE after beating earnings by 30%.
(46:10–47:20) Positioning: Bitcoin range-bound, waiting for recession fears to build before getting aggressive. Silver is the top offensive add right now, both miners and the commodity.

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