Like moths to a flame, there’s something about a red-hot market that draws crowds. Meme stocks, AI upstarts, and quantum moonshots have all set off fireworks lately, but with valuations soaring, it doesn’t take much to spark a selloff. All the while, market strategists warn that the cracks are showing as seasoned players quietly shift to greener pastures.

• Since the election, investors have poured $24B+ into SPACs amid a deregulatory renaissance — yet only ~11% of post-2019 deals have maintained value, while almost a third lost everything.
• Meanwhile, leveraged single-stock ETFs ballooned to $40B in deposits — with some funds already down 70%, even as the underlying stocks gained, thanks to “volatility decay.”

Market Icarus: Even after an eye-popping year for risky assets, many high flyers are seeing sharp pullbacks lately. Morgan Stanley’s investment chief notes investors are quick to punish anything short of perfection, with profit-taking hitting stocks that actually clear the bar. Meanwhile, emerging-market stocks are quietly up 28% — still trading at just 14x earnings versus 23x for the S&P. This new rotation might not make headlines yet, but sometimes, it’s the quiet ones that are full of surprises.