I mentioned in my editorial that “barring a black swan event,” the stock market would stage an impressive year-end rally. If we have another black swan event, it will most likely be caused by an implosion of the $3 trillion per year Private Credit industry that is paying investors 11% yields via leveraged loans in lower-grade credit. Bloomberg reported that some big Wall Street firms, led by Citigroup and Goldman Sachs, are apparently on the hook for a bad $2.6 billion leveraged bet in short-term Treasuries that caused the collapse of Blackbrook Asset Management Ltd. Leverage debt caused the implosion of the stock market in 2008, and although Blackbrook was reportedly leveraged 11,000 to 1 according to Bloomberg, Treasuries are more liquid, and there is apparently no implosion risk.S&P Global Market Intelligence recently issued a special report that flagged an “alarming surge” in selective defaults. Leverage loan defaults continue to rise in the wake of the First Brands (auto parts) bankruptcy as well as the Tricolor Holdings (subprime auto loans) liquidation, which in turn continues to hinder the private credit industry. If the leveraged loan default rate rises above 9%, I suspect that the private credit industry will grind to a halt. The other possibility is that the Fed comes to the rescue with its upcoming key interest rate cuts in time to save the private credit industry by allowing distressed lenders to refinance at lower yields.Amidst the opaque and obscure world of leverage finance, the U.S. stock market is standing out as a more certain investment due to double-digit earnings growth, the strongest earnings surprises in the past four decades in the second quarter, positive seasonality, and benefiting from strong inflows, especially from foreign investors.The technology leadership is increasingly about “betting on a billionaire.” Whether you pick Tim Cook, Jensen Huang, Mark Zuckerberg, etc., is up to you. I have placed my biggest bet on Nvidia’s Jensen Huang, but a new billionaire influencing the stock market is OpenAI’s Sam Altman, who recently announced a “strategic partnership” with AMD that sent its stock soaring. I have been very clear that I think Nvidia is the AI leader, but perhaps Sam Altman is worried about the availability of Nvidia GPUs, so it appears that OpenAI also had to make a deal with AMD. Nvidia GPUs remain superior to AMD’s semiconductors, but clearly, the explosive growth in AI is now lifting all boats. The big news is that gold is now up 50% year to date due to a lack of confidence in central banks as well as international turmoil. As an example of the turmoil, Japan now has its fifth prime minister in the past five years, namely Sanae Takaichi, who caused the Nikkei to surge based on her promise of more fiscal spending. Unfortunately, the “Takaichi trade” also puts the Bank of Japan in a pickle, since it will not be able to raise key interest rates, so the Japanese yen gapped down almost 2% relative to the U.S. dollar.