Small and mid cap coming alive.
Mid cap: $2B to $20B
Small cap: $250million to $2B
Disclosure: Own SOFI, U and TWLO.
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Dec 8, 128 Good number: Easy to Prosper.
Market is very green.
Other than AAPL, the other six magnificent 7 gain less than 1%. Market doesn’t think these companies benefit much from possible 3 rate cuts in 2024?
FinTech darling SOFI gains more than 10%…
FinTech stalwart MA makes a new ATH…
Breadth was excellent with RSP outperforming SPY by 0.7% yesterday. Corporate earnings still need to materialize for this to be sustainable though; P/E of S&P is in nosebleed territory even factoring in a drop interest rates. A falling dollar should help with something like 40% of earnings coming from abroad but that may not be enough with slow growth or no growth everywhere.
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Rotation!
Yep. Again RSP clobbers SPY - today by more than a full percentage point.
It’s no longer about the Magnificent 7.
I’m still cautious going into next year. Manch threw up a projected 19% increase in corporate earnings. It would have to be a lot better than that - even with rates back at 3-4% - to justify these levels.
Mag 7 are defensive stocks. These are the biggest cap in the world and have staying power. In a risk on environment I’d expect rotation into the more risky end of spectrum like small caps and long term tech plays.
Many rate sensitive names would benefit if Fed cuts rates next year. Names like ENPH:
People stop taking out loans to install solar because of high rates. Another obvious beneficiary is housing:
With plenty of “I’m a genius” tweets such as…
… a sharp pull back is near… hopefully is not a recession type of pullback or worse a medium term peak. That is, hoping for a less than 10% consolidation and not a 10-20% correction. Start of a bear market would surprise me. Btw, this bull market started from Oct 2022, more than a year.
About to complete wave 1.v or 1.v.(1)? Wave 2 = correction. Wave (2) = consolidation.
Wave (2) shouldn’t retrace below 4350. Below 4350 is wave 2.
Btw, now is to guess how high would wave 1 goes to.
Uh oh. Pullback in the cards now.
The Crypto market already had a minor pullback last week. Looks like TradFi will do soon.
I’m sure the leg will drop on this in the 1H of next year as people start to default. Consumers have a record level of CC debt. Loan losses on this stuff will increase, and it’ll crush these companies. Big banks are already increasing loan loss reserves.
Not clear how net inflows is computed.
Lots of monies: NVDA because is safest.
Not much money: PLTR because has the highest potential.
Disclosure: Own NVDA CRWD PLTR
Suddenly market turns red. Is the pull pack, a consolidation (less than 10%) or correction (10-20%)? Is obvious that a pull back is imminent, however still need a trigger/ catalyst. Media hasn’t come out with one yet.
Everyone was looking for a trigger after the crash of '87. Down 40% in a couple days.
The answer was just…everything was overvalued and there was no real justification for it.
P/E of S&P was at about 22 at the time.
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