BBG's Authers: "It might be unfair to call this a dash for trash. "
But nobody seems to care about quality. This is from Bloomberg’s Factors To Watch service, showing the results of buying the top 20% of stocks by a factor while shorting the worst 20%. "Since Liberation Day, buying quality stocks has been a one-way ticket to losses." Meanwhile, Momentum has been performing strongly. Source: Bloomberg, Neil Sethi
🔴America's valuation premium over Europe is historically WIDE:
The S&P 500 trades at a forward price-to-earnings (P/E) ratio of ~21 times, while the Stoxx Europe 600 trades at ~14 times. This brings the valuation gap up to ~7 points, the widest since at least the 2008 Financial Crisis. This comes as the Middle East war exposed Europe's structural vulnerability to energy shocks, turning what looked like attractive valuations into a value trap. At the same time, the US benefited from its relative energy independence and surging tech sector. Source: FT, Factset, Global Markets Investor
President Trump is flexing on his gains on $INTC...
Source: Donald Trump on Truth Social
At 858 days since ChatGPT's release, the Nasdaq is currently up 129%.
858 days after Netscape's release, the Nasdaq was up 155%. "History doesn’t repeat itself, but it still rhymes. If this chart has any merit we might only be in the middle innings of this buildout." - Bespoke Source: Negligible Capital
⚠️ The AI gold rush has a hidden cost… and Big Tech is footing the bill.
Here’s the reality no one wants to say out loud: • Big Tech free cash flow peaked at ~$300B in 2024 • By 2026… it’s heading toward ZERO Why? Because AI isn’t just innovation… it’s a capital black hole. → ~$715B in capex (2026) → +70% YoY increase → Nearly ALL cash flow consumed Margins are collapsing fast: • Microsoft → ~16% • Meta → ~3% • Alphabet → ~0% • Amazon → ~-2% So what’s happening behind the scenes? They’re borrowing. Aggressively. • ~$175B in new debt expected in 2026 • Buybacks slowing across the board • Key equity support disappearing Translation: The AI boom isn’t being funded by profits… It’s being funded by leverage. And that changes everything. Less cash flow + more debt + fewer buybacks = ⚠️ Fragile market structure The uncomfortable truth: AI may define the future… But it’s draining the present. And the bill is just getting started. Source: Global Markets Investor, JPM, Bloomberg
THE G.O.A.T...
Source: Stocks World
Google portfolio
Source: Stocks World
Hedge funds have rarely been this underweight North American stocks:
Hedge funds sold North American stocks for 3 consecutive weeks despite 3 consecutive weeks of S&P 500 all-time highs. This has pushed their allocation to North American equities down to the lowest on record relative to the MSCI All World Index, according to Goldman Sachs. At the same time, their allocation to Emerging Markets is up to an all-time high. What is happening here? Source: Global Markets Investor, Goldman Sachs
