The cost to hedge a 10% drop in the S&P 500 reached its highest level since October
Source: Win Smart, Bloomberg
The equal-weighted SP500 relative to the S&P 500 index has dropped to its lowest level since March 2009.
This year, the S&P 500 has gained ~10% while the equal-weighted index rallied just 3%. At the same time, Magnificent 7 stocks have rallied over 50%. Since the ratio peaked in February 2023, the S&P 500 is up ~29% compared to a 7% gain of the equal-weighted index. Meanwhile, the top 10% of US stocks now account for ~75% of the S&P 500, the most since the 1930s’. The market has never been driven by so few names. Source: The Kobeissi Letter
Penny stock trading is booming.
Seven of the top 10 most traded US equities in May are penny stocks worth less than $1. None are profitable Source: FT, Gunjan Banerji
Abercrombie & Fitch $ANF making Nvidia $NVDA shareholders look poor...
Abercrombie & Fitch reported its financial results for the first quarter today. Here's what its CEO Fran Horowitz said in a press release on Wednesday. Abercrombie & Fitch stock is now up close to 70% versus the start of 2024. Source: Conor Mac, InvestmentTalkk
Momentum is the winner YTD 🏆
Source: The Long view
Software stocks got hammered yesterday.
iShares Tech Software Sector ETF finished -5.8% (biggest daily drop since the pandemic w/Salesforce DOWN 20% (worst session in ~20 years), UiPath -35%, Okta -6%, Mongo DB -24%. Source: Bloomberg, HolgerZ
Bullish sentiment on US equities is through the roof:
In May, 48.2% of Americans anticipated stock prices to increase over the next 12 months, according to the Conference Board Consumer Confidence Survey. This is the 3rd highest reading in history, only below the January 2018 and March 2024 surveys. Over just 2 years, this share has nearly doubled as stocks recovered from the 2022 bear market. Meanwhile, the S&P 500 has rallied a massive 48% since the October 2022 low. Stock market sentiment is incredibly strong. Source: Bloomberg, The Kobeissi Letter
The S&P 500 just posted its best weekly streak in 35 years.
The index has increased in 23 of the last 30 weeks, a joint record since 1989, according to Deutsche Bank. It could thus be that some consolidation is due... Source chart: DB, The Kobeissi Letter
