Back-to-back hot inflation prints. CPI at 3.8% yesterday. PPI this morning at 1.4% month over month, nearly triple what the Street was expecting. That's the biggest single-month jump in producer prices since March 2022. Year over year at 6%. Energy up almost 8% on the month. Gasoline up 16%. Every stage of the pipeline just printed multi-year highs. The reaction this morning has been telling. The broad market is selling hard. Over 60% of S&P 500 names are on the wrong side of the daily trend right now. The equal-weight readings on our system, which track what the average stock is doing, just broke their weekly trend for the first time in this run. Small caps are barely clinging on. The broader market is cracking under these numbers. But the mega caps are fine. They sold off briefly this morning and bought right back. The largest names in the S&P and Nasdaq are holding up while everything underneath them deteriorates. The gap between what the biggest stocks are doing and what the average stock is doing just got wider than it's been at any point in this entire rally. This is exactly the dynamic we've been watching. And I think it's worth stepping back and explaining why it keeps happening, because we're going to keep seeing it. There are two research papers from 2013 that have been stuck in my head since graduate school, and I think they explain what's going on better than anything on CNBC right now. The first, by John Makin at AEI, documented a paradox. After 2008, the Fed printed an enormous amount of money. It was supposed to get Americans borrowing again. It didn't. The money leaked out, flooding overseas economies with capital they didn't ask for. Brazil's president called it a tsunami. But while QE was pushing dollars out through the credit channel, it was simultaneously pulling foreign money back in through the equity channel. The Fed inflated U.S. asset prices to the point where every pension fund and sovereign wealth manager on Earth had no choice but to pile into the S&P 500. It was the deepest, most liquid market on the planet and nothing else offered a comparable return. The drain and the fountain were the same pipe. The second, by Helene Rey at Jackson Hole, explained why this could never be fixed. The old textbook said countries could protect themselves from the Fed by floating their currency. Rey proved that was wrong. In a world of cross-border balance sheets and dollar-denominated markets, you either wall off your capital account or you dance to the Fed's music. There is no third option. When the Fed eases, volatility drops, banks lever up, credit expands, and capital flows into U.S. assets from everywhere on the planet. That dynamic never went away. It just changed pipes. In 2012, excess capital flowed through credit channels. In 2021, it flowed through fiscal stimulus. Right now, it's flowing through AI capital expenditures. There's $700 to $800 billion in hyperscaler CapEx this year, and the money funding it doesn't all come from here. It's Japanese pensions that can't find yield at home. European insurers chasing dollar returns. Gulf funds recycling oil revenue. Korean institutions that don't have a domestic AI market deep enough to absorb their savings. All of that capital ends up in about seven stocks. That's why the S&P sits near all-time highs while the average stock goes nowhere. It's not about earnings. It's about plumbing. And every time inflation comes in hot, we're going to get these shakeouts. The broad market sells off. The rate hike conversation gets louder. And then the mega caps stabilize because the flows supporting them are global and mechanical, not driven by what PPI printed this morning. That's exactly what we're watching happen in real time today. This pattern holds until the plumbing actually breaks. And the thing that breaks it isn't a CPI or PPI number. It's the dollar weakening enough that foreign capital starts going home. Deutsche Bank's data shows 80% of recent foreign inflows into U.S. stocks are hedged. There's $26 trillion in foreign-held U.S. assets with investors cutting dollar exposure at an unprecedented pace. When local currency returns for foreign investors go negative, they sell to repatriate. FX moves first. Equities follow. Besant is in Tokyo right now. Trump is in Beijing. They know what the risk is. For now, every hot inflation print will produce the same reaction. The broad market shakes, people ask if this is the top, and then the handful of stocks that are absorbing global capital flows stabilize the index. That's the pattern until the plumbing changes. And the plumbing hasn't changed yet.