The performance differential between Nasdaq 100 (Tech) and Russell 2000 (us small-caps) is extreme.
Yet the earnings gap between Mega Cap Tech Stocks and Small Caps has widened to all an all-time high. Source: Barchart
$TSLA is the only Magnificent 7 Stock to be in the red over the last 12 months.
Not only that, Tesla is getting absolutely trounced by the rest of the group. Should we rename this group the Magnificent 6 going forward? Source: barchart
From Facebook to Meta...
Swith the benefit of insight the renaming wasn't that bad after all... More seriously, it seems that the shift from metaverse to ai and the focus on shareholder value have been working very well. What a turnaround by Zuck... By the way, he will receive a $175 million quarterly dividend, on track for making $700 million annually in dividend... Is Mark Zuckerberg the mist underrated tech CEO. Source chart: Mac10
Adaptability is an underrated skill.
Source: The Investing for Beginners Podcast
In just 15 trading days, the new Bitcoin ETFs have made the commodities ETF leaderboard.
$IBIT at #7, $FBTC at #9, $ARKB and $BITB at #23 & #24 How long before $IBIT overtakes $SLV and the 2 top gold ETFs $IAU and $GLD ? Source: HODL15Capital
To put things into perspective
Assuming Nvidia meets estimates, the Mag 7 generated $523bn in sales during 4Q, +14%YoY. Revenue growth for remaining 493 S&P 500 stocks was a comparatively paltry 2%. Margins for the mag 7 expanded by ~750 bp YoY to 23% vs. a 110 bp contraction to 9% for remaining 493 stocks in the S&P 500, Goldman has calculated. Source: HolgerZ, Goldman Sachs
Unemployment Cycle update after Fridays Non-Farm-Payrolls
Only during the 1948 recession did hashtag#unemployment rise so slowly. If we don't see a pick up soon, this unemployment cycle might turn out not to be a recessionary one. Source: Gero Patterer, CFA
Friday's market action tells a lot about what's currently going on
1) US large-caps equities index recorded strong gains ($SPX +1.07%; $NDX +1.69%) thanks to huge advance by $META (+20%) and $AMZN (+7%); 2) Underneath the surface, there is some selling taking place - the S&P 500 equally weight is DOWN -0.08% on the day. We need to see decent market breath for the equity bull market extend as the mag7 (or rather the "mag 4" as leadership is even more narrow than in 2023) will not be able to carry the market forward for ever... Source: Bloomberg
