Did you read past the headline to see that it was a 4% monthly loss? “Biggest since April” doesn’t mean big.
Also, the S&P 500 is the main one that matters in terms of index flows (QQQ has $400B in total AUM). S&P uses a float-adjusted weighting scheme. If SpaceX floats like $50B out of whatever fantastical total market cap they peg at the offering, only $50B would be initially reflected in that index.
Brace for the contorted "Prof. Plumb" argument for why index flows somehow benefit the top-weighted stocks more than the majority. I've been surprised over the years at how tenaciously this case has been made despite all logic and evidence.
That completely understates the amount of pain endured by buy-and-holders in big, steep drawdowns in 2011, 2018, 2020, 2022 all near or exceeding 20%. We're a measly 3.5% off the record high.
So far the tape refuses to reprice for a lasting oil surge. It's less blind complacency than a somewhat rational yet hopeful stance that accounts for the odds of getting lucky with a near-term de-escalation.
It helps that the S&P was at this level five months ago and sentiment was already subdued.
The market continues to operate pretty mechanically, each big-cap index down in lockstep today.
The jump in event-driven volatility prompted an incremental step-back from risk, not an emotional flight. The rotational muscle memory (sell one thing, buy another) is ingrained. Unstable equilibrium.
Lots of cringy stuff in there but a classic
"My business is videogame arcades, laundry and cigarette machines and trucking. I dabble a little bit in personal loans and politics."
definitely
The market is sort of taking this as "Who knows if it will work but now we know where their pain threshold is..."
The broad selloff has broken the market's "protection through rotation" routine, the S&P 500 cracks the bottom of the YTD range.
Old trader voodoo says breaking the December low early the next year is a bad omen; we just did.
Still only 4% off a record high, getting as oversold as at recent lows.
History says regional military conflicts don't end bull markets. Flight from risk tends to be brief if the economy/market isn't already in a downturn.
Still, markets have been in an uneasy equilibrium: Early-cycle reflation hopes, late-cycle credit fissures, existential AI concerns.
New column.
Right because the original saying is "The informant in the coalmine."
The warning comes when the canary dies, not when it sings
Here we go, Nvidia's stock decline creates this "kiss chart," its valuation coming into parity with the broad market.
Ultimately, valuation is just a gauge of collective sentiment about an asset's prospects, the noise around the sustainability of the AI capex boom costing NVDA its premium for now.
The pollsters at Quinnipiac doing the "long-time fan, first-time caller" thing on Pennsylvania NFL quarterbacks and coaches.
Should prompt nothing but sane, normal discourse...
Samsung and SK Hynix are now 50% of the KOSPI, it's more disengaged from metals/macro.
I hate that one too. Who decides where the sky starts, maybe it's 150 feet off the ground?
People have been talking about it constantly for months
Not a big part of the overall NVDA story
Yes, NVDA shares are starting to look inexpensive vs. current earnings and reliably projected profits over the next year. The market is wary that the company might be "over-earning" and present demand trends can't be extrapolated.
Similar to how Apple traded through the first iPhone mega-cycle...
No I’m not saying NVDA will or should get that cheap. The overall market multiple was only 13x in 2012 (vs. 22x now) when AAPL got to 10x, and consumer hardware cycles face a higher burden of proof. Still…
Yes, NVDA shares are starting to look inexpensive vs. current earnings and reliably projected profits over the next year. The market is wary that the company might be "over-earning" and present demand trends can't be extrapolated.
Similar to how Apple traded through the first iPhone mega-cycle...
Yes, NVDA shares are starting to look inexpensive vs. current earnings and reliably projected profits over the next year. The market is wary that the company might be "over-earning" and present demand trends can't be extrapolated.
Similar to how Apple traded through the first iPhone mega-cycle...
Another nasty mechanical whipsaw day in the market, momentum getting upended in both directions.
The S&P 500 worst performers year-to-date are, on average up big. Vice versa with the YTD leaders....
Enough, you obviously are forcing an entrenched view.
"if"
"ish"
I'm just saying "Finally" is the wrong response to me.
I've been on this publicly for more than a decade.
