The Mag7 as a source of cash to fund the Semiconductors $SOX trade?
The SOX/MAG ratio continues exploding higher and is now trading at its highest level since 2019. The move has been nothing short of spectacular, reinforcing the idea that semis have become the market's preferred AI expression. Source: TME
This morning, South Korea’s KOSPI crashed -10%, wiping out over $520 BILLION in a single day.
This was the 3rd largest single-day crash in the index’s history. Both Hynix and Samsung were down double-digits Source: Bull Theory
This is the AI leaders-vs-laggard basket
Source: zerohedge, Bloomberg
The Memory ETF is now the fastest ETF in history to hit $10 billion, $15 billion, and $20 billion in assets under management.
Source: Charlie Belillo
S&P 500 and Nasdaq-100 rebalances take effect before Monday’s open, June 22.
S&P 500 adds $MRVL and $FLEX; removes $POOL and $CPB. Nasdaq-100 adds $ALAB, $CRWV, $NBIS, $RKLB and $TER; removes $CHTR, $CTSH, $INSM, $VRSK and $ZS. Source: Wall St Engine
There are 2 markets currently 1) The AI stocks; 2) The sources of funds to buy the AI stocks
This scatterplot chart below shows that earnings do matter for AI-themed stocks, but for the rest of the Technology universe, earnings really don't matter YTD. Source: Konstantin Fominykh
MASSIVE BLOODBATH IN THE IT OUTSOURCING SECTOR.
Accenture reported earnings this morning and cut its full-year revenue forecast. Its quarterly bookings fell 2% and the stock crashed 18%. Accenture is the largest IT services company in the world, so when it reports weak demand, every other company in the sector falls with it. Cognizant fell nearly -8%. Wipro fell nearly -8%. Capgemini fell -8.4% to its lowest price in a year. IBM fell -4%. EPAM dropped to near a 52-week low. Two things are driving the selloff. Companies are spending less on IT consulting as the economy slows, and the market now believes AI is starting to do the work these companies used to charge billions for. Both pressures hit the same business model at the same time. This is a direct problem for India. Indian IT has been one of the only sectors holding up the Nifty. TCS, Infosys, HCLTech, and Wipro have been carrying the index. These companies run on the same model as Accenture and earn most of their revenue from US and European clients. Accenture's results are treated as a preview of what is coming for TCS and Infosys. Their US-listed shares already fell 3 to 5% tonight. No surprise Indian markets are getting hit... Source: Bull Theory
Retail investors are piling into SpaceX at an UNPRECEDENTED pace:
The ARK Innovation ETF, $ARKK, recorded ~$7 billion in inflows in June, the largest in nearly a year, with the surge coinciding precisely with the day of the SpaceX IPO. Over the first 3 trading sessions following its IPO, retail investors purchased a net $369.8 million of SpaceX, $SPCX, according to Vanda Research. By comparison, retail investors purchased just $88.2 million of Nvidia, $NVDA, over the same time. SpaceX's 3-day retail purchases roughly matched the COMBINED total of Nvidia, Alphabet, Amazon, Microsoft, Meta, the S&P 500 ETF, $SPY, and the Nasdaq 100 ETF, $QQQ. The retail mania is unlike anything seen before. Source: Global Markets Investor, Bloomberg
