Back in the day, a flight to safety was the canary in the coal mine. Stock and bond traders tend to sense trouble before everyone else does.

And right now, something is up. Investors are worried about whether AI infrastructure companies can repay their massive debt, and the credit default swap market is pricing in a 55% chance of default. As a result, money is moving somewhere safer.

Semiconductor stocks have taken a big hit. They’re down 24% from their June peak, including a 15% drop in the last three weeks alone.

The word “recession” is coming up again. That brings in what’s called the wealth effect: people spend based on how wealthy they feel, not just on what they actually have. When portfolios drop, people feel poorer and pull back. Are you buying the steak, or sticking with chicken?

Higher rates are tough on builders too, not just buyers. With buyers hesitant to jump back in, builders are pulling back on new construction. That means less new inventory down the road.

So what does it mean? My take: there’s always opportunity. The window to buy is approaching quickly. If you wait for rates to drop, you may miss the best time to buy, because when rates fall, more buyers come back and competition goes up.

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