Just because the tech bubble didn't burst this year doesn't mean there isn't one. During the dawn of the smartphone era, startups could raise money simply by pitching themselves as the mobile-first solution to any problem. However, with the hardware market almost fully saturated and software market overcrowded, companies are struggling to live up to prior valuations.

Since 2015, leading tech research firm CB Insights has counted 80 down rounds, or instances where startups accepted additional funding at reduced valuations. Roelof Botha, a partner with VC firm Sequoia Capital, says there is a "fog hanging over the industry" similar to what he felt after the dot-com boom. Due in part to the overall unattractiveness of expected returns in public financial markets, private equity funding has been easy to come by.

12 billion in the first quarter of 2016, a 10-year high. Bill Gurley, a partner with Benchmark VC firm benchmark, in a Bloomberg interview. In addition to free-flowing money from the venture capital world, private companies have benefitted from a surge in capital available from so-called "tourist investors," i.e. hedge funds and mutual funds who don't usually occupy the space. Tourist money has papered over the cracks of lackluster financial performance for many private companies, but the worry is if earnings don't grow and economic conditions worsen, these fickle visitors will not hesitate to head for the hills.

Oil continued to rebound this week with crude prices hitting 15-month highs as stockpiles fell more than expected. Saudi Arabia is outwardly confident other oil-producing countries will join OPEC in cutting production, but it could be just wishful thinking. In reality, the Saudis have little choice but to cut output. Political pressures at home are building due to a lower standard of living resulting from budget cuts.

The kingdom will want to boost oil prices to maximize proceeds from the upcoming initial public offering (IPO) of state oil company Aramco. Lastly, it needed send a bullish signal to investors before this week's bond auction in order to maintain its credit rating. 16.5 billion sale earlier this year.

5.5 billion worth of five-year bonds at a 135 basis point premium to U.S. 6.5 billion 30-year notes at a 210 basis point premium. 50 per barrel, there wasn't any shortage of demand. 67 billion in bids. The rebound in oil prices has also done wonders for the high-yield bond market, with junk bonds rallying to 2016 highs this week. Junk bonds typically track the performance of stocks, but with equity markets largely unchanged in recent months the correlation has broken down.

The rare divergence could mean one of two things: stocks could be poised for a rally or junk bonds could be set for a snapback. At the same time, credit spreads have also compressed considerably. With oil's comeback also boosting headline inflation expectations, analysts are once again warning about duration risk. 1.1 trillion in losses for U.S.

Average bond maturities worldwide are more than double the inflation-adjusted level of 2009 and three times that of 1994, creating elevated duration risk. Foreign central banks and sovereign wealth funds, large buyers of U.S. While bond buyers are facing greater risks, debt issuers are enjoying a bonanza. Sprint this week became the latest junk-rated company to sell bonds at investment-grade prices.

3.5 billion of bonds at rates similar to larger competitors Verizon and AT&T thanks to some creative maneuvering. To get around covenants on existing debt, Sprint is transferring 14% of its wireless spectrum holdings to a special purpose vehicle that will then issue the new bonds. 2 billion a year to lease back the assets. By virtue of this creative arrangement, the new bonds will occupy a senior position in the company's capital structure because lease payments would continue even in bankruptcy.

A combination of market forces and faulty regulation are accelerating the stampede into low-cost index funds. 250 billion from active funds, according to Morningstar (via the WSJ). 5 trillion in assets under management (AUM) for the first time ever. 55 billion in Q3 net inflows in Q3 were attributed to its iShares ETF unit. The fact a handful of large asset managers now own a significant portion of the stock market could reduce the incentive for corporate competition and impair the capitalist system.