@datatrekresearch.bsky.social
Your daily guide to Markets, Data and Disruption. Start a 2-week FREE trial on datatrekresearch.com to receive one of Wall Street's most followed daily market commentaries!
2/2 ...since the market rewards scale in this industry and that ends up pushing successful companies into the top 1,000 names by capitalization. It is correspondingly overweight the “physical world”, where disruption makes its presence felt much more slowly.
$IWM
1/2 The Russell 2000 index reflects a version of the US stock market that diverges noticeably from what has become the most important driver of long-term shareholder value. It is structurally & profoundly short Tech...
Markets are struggling to decide how to categorize current Mideast tensions, so in tonight's report we have a 3-point checklist to determine when the narrative shifts from “wait and see” to “sell”.
Read it by signing up free on datatrekresearch.com!
Be sure to watch our video on Energy sector weightings out last week, as it’s proven to be very useful amid current market conditions. As oil prices keep climbing, you don’t want to be underweight Energy. Make sure your portfolio is properly positioned!
youtu.be/Mf_NgZywbks?...
In last night's report: "The fact that Energy stocks have not stared to roll over is a sign that markets are beginning to see higher oil prices as more than just a passing problem for the US and global economy. We continue to recommend at least an index-weight position in this sector."
$XLE
German yields are nearing multi-year highs as inflation fears mount. All of this is a sharp reversal from the last 12 months, when the euro seemed unstoppable and German bonds were considered viable substitutes for Treasuries.
2/2 ...History shows this approach can be a great trade but is generally an underperforming long term investment. Now is the time to reconsider US small cap exposure.
$IWM
1/2 The Russell 2000’s nearly 4-month streak of prior 100-day outperformance versus the S&P 500 came to an end yesterday. Small caps are structurally overweight the “real world” (Industrials, Energy, Real Estate, Materials) and very light on “disruption” (Tech)...
Software stocks just went through a near 3-sigma selloff — one of the worst stretches in years.
Now they’re rebounding and $ORCL just beat earnings.
Why the comeback may have further to run: www.youtube.com/watch?v=dvW-...
$IGV
The Russell 2000’s nearly 4-month streak of prior 100-day outperformance versus the S&P 500 came to an end today. Now is the time to reconsider US small cap exposure.
Read why in tonight's report by signing up free on datatrekresearch.com!
3/3 ...The tension between lackluster near-term fundamentals and lofty valuations helps explain why the S&P is basically flat over the last almost 6 months.
2/3 ...This implies margin pressure, an unwelcomed development. Every S&P 500 sector except Tech and Real Estate is trading rich to its 5-year average valuation...
1/3 After 2 consecutive quarters of increasing their S&P 500 earnings estimates during a quarter, Wall Street analysts are back to their typical pattern, reducing their Q1 expectations. At the same time, they have been increasing their Q1 revenue estimates...
Software stocks just went through a near 3-sigma selloff — one of the worst stretches in years.
Now they’re rebounding and $ORCL just beat earnings.
Why the comeback may have further to run: www.youtube.com/watch?v=dvW-...
$IGV
3/3 ...But if it resolves quickly, global Tech stocks outside the US would likely resume outperforming, as concerns about AI disruption and heavy spending by US Big Tech would once again move to the forefront.
2/3 ...foreign Tech stocks in the current volatile environment. As long as the US-Iran conflict persists, we expect US Big Tech to continue beating rest of world Tech...
1/3 US Big Tech is now outperforming rest of world Tech amid geopolitical uncertainty after lagging in both January and February. US Big Tech names are globally scalable, market leaders with large competitive positions and are therefore perceived as “safer” investments than...
We just published a video yesterday on why Software stocks are staging a comeback.
Subsequently, $ORCL beat earnings and is rallying hard.
Not bad timing.
Here's the data on why US large cap Software should keep outperforming!
www.youtube.com/watch?v=dvW-...
Higher oil prices have not yet lifted inflation expectations embedded in 10-year Treasuries past their 14-month average, likely because of recession worries.
US large cap aerospace/defense stocks have outperformed by +1 sigma & the largest names trade for an avg of 39x forward earnings. The group’s strong fundamentals merit a valuation premium, but further upside may only be possible if the current Mideast conflict worsens.
$ITA
Our video on Software's comeback was well timed, with $ORCL beating earnings expectations and up 10% today. Watch it below!
Why Software Stocks Are Making a Comeback youtu.be/dvW-suzoeLw?... via @YouTube
Large cap US software stocks recently had their worst 50 day stretch since at least 2021. Worse than the Fed rate shock in 2022. That's how much AI disruption fears have hit the group.
But the clouds may be lifting, watch why below!
youtu.be/dvW-suzoeLw?...
$MSFT, $CRM & $ORCL are up an average of +3.5% since the US struck Iran versus the S&P 500’s -1.2% fall. In this video, we explain that users may be more likely to stick with proven existing services amid economic uncertainty. Watch below!
youtu.be/dvW-suzoeLw?...
In our latest video, we show that the clouds may be lifting for US large cap Software stocks. Hit the link below to watch! It is only 6 minutes long and well worth your time.
Why Software Stocks Are Making a Comeback youtu.be/dvW-suzoeLw?... via @YouTube
Large cap US software stocks recently had their worst 50 day stretch since at least 2021. Worse than the Fed rate shock in 2022. That's how much AI disruption fears have hit the group.
But the clouds may be lifting, watch why below!
youtu.be/dvW-suzoeLw?...
Investors feared AI would destroy Software companies.
But after a historic selloff, the biggest names in the sector are suddenly outperforming the S&P 500.
Watch why Software stocks may keep rebounding below!
www.youtube.com/watch?v=dvW-...
Software stocks are staging a surprising comeback.
After a near 3-sigma collapse, $MSFT, $CRM, and $ORCL are now outperforming the S&P 500 during the oil shock. Watch why & how it can continue below!
www.youtube.com/watch?v=dvW-...
$MSFT, $CRM & $ORCL are up an average of +3.5% since the US struck Iran versus the S&P 500’s -1.2% fall. In this video, we explain that users may be more likely to stick with proven existing services amid economic uncertainty. Watch below!
youtu.be/dvW-suzoeLw?...
2/2 ...The index can generate +8-10% returns from here without much multiple expansion. Better results will need valuations to return to record highs (22 – 23x). Either way, any macro shocks will need to be brief, or multiples may contract back towards the long run averages.
1/2 Even with the S&P 500’s recent pullback and upward estimate revisions for 2026 and 2027, the index still trades for 21.6x forward 12-month expected earnings. This is above the 5- and 10-year averages of 20.0x and 18.8x and reflects strong investor confidence in US large caps...