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Super Bowl Economics
Market update
Underneath all time highs
Rates aren’t coming down… now what?
The power of AI and inference
Recommendations and Links
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Market Update📈📉
Welcome back.
The Good
The most bullish thing I see out there for the stock market is the lack of new lows… Most stocks are holding and staying above their 52 week lows…
It's mathematically impossible for the stock market to get worse, go into a correction, or even think about the possibility of a bear market, without seeing an expansion in new lows first.
And we're just not seeing it.
The NYSE Composite went out last week at a new all-time high. And even the most short-term of new lows lists have yet to see any expansion.
The Bad
However, the bad thing is that there have been a number of bearish divergences adding up.
The stock market just entered what is historically one of the worst times to own stocks of the entire year, the new 52-week highs list has already dried up.
We are in nomansland.
The all time highs list peaked 2 months ago, and has been deteriorating with every new high you see in the S&P500 and Nasdaq (neither one closed at a new high last week).
US Treasury Bonds are falling off a cliff. When a $130 Trillion asset class is crashing, is your bet that it won't impact the stock market?
You're seeing Consumer Staples outpacing Consumer Discretionary stocks, which is what you normally see in the market right before a good rug pull.
And worst of all, the US Dollar is ripping higher. Over the past several years, when the Dollar is strong, stock are not…
The US Dollar is the only safe haven in this market. And Dollar Index Futures are up every week this year - 7 weeks in a row. All of these, in my opinion, are definitely bad for stocks.
The UGLY
This market is losing its leaders.
Adobe, arguably the most important software stock, is getting crushed.
The iShares Software Index Fund just got back to its former bull market highs from late 2021.
The most important stocks within the index are already rolling over.
If Software is falling, Apple and Microsoft are rolling over, and momentum is diverging everywhere, do you think the Tech Sector Index itself won't follow?
Remember, Technology represents 30% of the S&P500 and over 50% of the Nasdaq100 $QQQ.
Now, this is all to say that we cant possibly see the future and all these bearish signals could change in an instant.
We as investors and market participants must stay nimble.
Twitter links from the pod:
Podcast & YouTube Recommendations🎙
The Legend Behind the Legend: This awesome interview was served up of Steve Williams who was Tiger Woods caddy for 13 years. Steve had the best seat in golf for 13 years. There are so many great stories on Tiger Woods’ crazy life, the one on how he got fired and on the legacy of Tiger Woods.
The Compound brings back my favorite guest:
B2 is the best new podcast in tech and investing. This episode was a phenomenal cruise around tech markets.
Best Links of The Week🔮
"Nvidia’s surge to an all-time high is the biggest single-session increase in market value in history, besting Meta’s historic gain just three weeks ago. Shares of the chipmaker jumped 16% Thursday, adding about $277 billion in market capitalization and bringing its total market value near $2 trillion. The addition eclipsed the $197 billion gain made by Facebook-parent Meta at the start of the month." Source: Bloomberg
"Japan’s benchmark stock average hit a record high Thursday after 34 years of waiting, and the reason mostly boils down to one word: profits. Japanese companies are making a lot of money, and they are handing out a lot of it to their shareholders. In contrast to 3½ decades ago, when Nikkei Stock Average record highs last made headlines, no bubbles or magical thinking are needed to justify the new peak." Source: WSJ
"Social media company Reddit filed its IPO prospectus with the Securities and Exchange Commission on Thursday after a yearslong run-up. The company plans to trade on the New York Stock Exchange under the ticker symbol “RDDT.” Its market debut, expected in March, will be the first major tech initial public offering of the year. It’s the first social media IPO since Pinterest went public in 2019." Source: CNBC
"A patient implanted with Neuralink’s brain technology can now control a computer mouse just by thinking, the company’s founder Elon Musk said. ″[The] patient seems to have made a full recovery with no ill effects that we are aware of and is able to control the mouse, move the mouse around the screen just by thinking,” Musk said in a Spaces session on social media platform X. Neuralink is the billionaire’s startup, which says it has developed a brain implant designed to help humans use their neural signals to control external technologies. The company aims to restore lost capabilities such as vision, motor function and speech." Source: CNBC
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The Good, The Bad, The Ugly.