My Saturday show highlighted the start of the rotation from tech stocks to the broader market, as exemplified in the trends in the NASDAQ and the Small Caps 2000. This trend has continued, and on Wednesday it went into overdrive as the world’s largest technology companies got hammered as concern about tighter US restrictions on chip sales to China spurred a selloff in the industry that has led the bull market in stocks.
I was around for the dot-com bubble, a stock market bubble that ballooned during the late-1990s and peaked on Friday, March 10, 2000. This period of market growth coincided with the widespread adoption of the World Wide Web and the Internet, resulting in a dispensation of available venture capital and the rapid growth of valuations in new dot-com startups.
One common theme is “its different this time”. You cannot apply normal valuation rules, they do not apply. Well, of course the recent AI trends have been driven by confidence of a new business era, and people again are talking about new rules, despite the fact that companies like NVIDA have sold the lions share of their cards to established and cashed up big tech companies like Microsoft, and others in a weird feedback loop. The real benefits of AI for normal downstream businesses are still to come.
So are we seeing the start of another tech-wreck? I think its too soon to tell.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
My Saturday show highlighted the start of the rotation from tech stocks to the broader market, as exemplified in the trends in the NASDAQ and the Small Caps 2000. This trend has continued, and on Wednesday it went into overdrive as the world’s largest technology companies got hammered as concern about tighter US restrictions on chip sales to China spurred a selloff in the industry that has led the bull market in stocks.
I was around for the dot-com bubble, a stock market bubble that ballooned during the late-1990s and peaked on Friday, March 10, 2000. This period of market growth coincided with the widespread adoption of the World Wide Web and the Internet, resulting in a dispensation of available venture capital and the rapid growth of valuations in new dot-com startups.
One common theme is “its different this time”. You cannot apply normal valuation rules, they do not apply. Well, of course the recent AI trends have been driven by confidence of a new business era, and people again are talking about new rules, despite the fact that companies like NVIDA have sold the lions share of their cards to established and cashed up big tech companies like Microsoft, and others in a weird feedback loop. The real benefits of AI for normal downstream businesses are still to come.
So are we seeing the start of another tech-wreck? I think its too soon to tell.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
This is our weekly market update, starting in the US, then Europe, Asia and Australia and covering commodities and crypto.
This week, hopes of US interest rate cuts before the end of the year rose after data this week showed that inflation was cooling faster than expected, has muddied the waters, though all three US benchmarks powered higher, despite results from three major banks, which disappointed for different reasons. MSCI’s gauge of stocks across the globe rose 0.78, hitting another record intraday high.
The S&P 500 and Dow surged to all-time highs before giving up much of those gains by the close. So far this year, the Dow has risen 6.4%, underperforming the broader S&P 500 and the tech-heavy Nasdaq Composite, which have advanced 18.2% and 23.1%, respectively, over the same period. The S&P 500 was recently trading at 21.4 times forward earnings, compared to a historical average of 15.7, so its probably way over-valued!
Banks got hit at the start of the US earnings season after reports from JPMorgan, Citigroup and Wells Fargo. Wells Fargo slumped 6 per cent after warning it won’t be able to whittle away costs as fast as forecast, after the lender missed estimates for quarterly interest income. JPMorgan missed on a few key metrics like net interest income — despite posting record profit from by rising investment banking fees. However, shares of the world’s largest bank dipped 1.2%. Citigroup said costs for the year are likely to be at the high end of the range previously provided and fell 1.8% despite reporting a surge in investment banking revenue.
In Australia, the flagship S&P/ASX 200 Index gained 0.9 per cent, to a record 7959.3 points, to finish the week up 1.2 per cent. In the final session of the week, the market was helped higher by Australia’s largest bank, CBA which added 1.3 per cent to $131.66, extending a bull run that has sent shares up more than 30 per cent in 12 months. As CBA ended the day with a $220.3 billion market cap, it surpassing BHP’s $220.1 billion capitalisation. The latter finished the day 0.37 per cent lower at $43.40 after informing the market late on Thursday that it would suspend nickel mining operations in Western Australia. Friday marked the first time that CBA has overtaken BHP as Australia’s most valuable public company since November 2021.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
Markets Reach For The Stars, Even As A Nascent Turn Is Under Way!
This is our weekly market update, starting in the US, then Europe, Asia and Australia and covering commodities and crypto.
This week, hopes of US interest rate cuts before the end of the year rose after data this week showed that inflation was cooling faster than expected, has muddied the waters, though all three US benchmarks powered higher, despite results from three major banks, which disappointed for different reasons. MSCI’s gauge of stocks across the globe rose 0.78, hitting another record intraday high.
The S&P 500 and Dow surged to all-time highs before giving up much of those gains by the close. So far this year, the Dow has risen 6.4%, underperforming the broader S&P 500 and the tech-heavy Nasdaq Composite, which have advanced 18.2% and 23.1%, respectively, over the same period. The S&P 500 was recently trading at 21.4 times forward earnings, compared to a historical average of 15.7, so its probably way over-valued!
Banks got hit at the start of the US earnings season after reports from JPMorgan, Citigroup and Wells Fargo. Wells Fargo slumped 6 per cent after warning it won’t be able to whittle away costs as fast as forecast, after the lender missed estimates for quarterly interest income. JPMorgan missed on a few key metrics like net interest income — despite posting record profit from by rising investment banking fees. However, shares of the world’s largest bank dipped 1.2%. Citigroup said costs for the year are likely to be at the high end of the range previously provided and fell 1.8% despite reporting a surge in investment banking revenue.
In Australia, the flagship S&P/ASX 200 Index gained 0.9 per cent, to a record 7959.3 points, to finish the week up 1.2 per cent. In the final session of the week, the market was helped higher by Australia’s largest bank, CBA which added 1.3 per cent to $131.66, extending a bull run that has sent shares up more than 30 per cent in 12 months. As CBA ended the day with a $220.3 billion market cap, it surpassing BHP’s $220.1 billion capitalisation. The latter finished the day 0.37 per cent lower at $43.40 after informing the market late on Thursday that it would suspend nickel mining operations in Western Australia. Friday marked the first time that CBA has overtaken BHP as Australia’s most valuable public company since November 2021.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
This is our weekly market update, where we start in the US, cross to Europe and Asia, and end in Australia, while covering the main points in commodities and crypto along the way.
This past week has been a doozy, with US markets still clawing higher on increased rate cut expectations, as the latest employment data and adjustments posed some important questions alongside a weakening the dollar, while in the UK the incoming Labour Government won with a whopping seat majority despite voters really voting against the Tories rather than for Starmer.
In France, horse trading ahead of Sundays second pole could mean the Right do not get the prize they were expecting, while Oil was firmer across the week on fears of middle east conflicts and in Crypto, Bitcoin has dropped more than 20% from recent highs.
Wall Street stock indexes closed firmer on Friday, with the tech-heavy Nasdaq and benchmark S&P 500 hitting record highs.
All up, the Dow Jones Industrial Average rose 0.17%, to close at 39,375.87. The S&P 500 gained 0.54%, at 5,567.19 and the Nasdaq Composite advanced 0.90%, to 18,352.76. For the week, the S&P 500 gained 1.95%, the Nasdaq rose 3.5% pct, and the Dow climbed 0.66%. The Russell 2000 Small Cap index is down 0.95% for the week and the S&P500 equal weight was parallel to its 2022 high, showing the narrowness of the support for the all time highs on the S&P500.
French financial markets have come under selling pressure since President Emmanuel Macron called for a snap election last month, with concerns that a far-right win could add to worries over fiscal sustainability. But there is also nervousness about what will happen if there is no clear winner in Sunday’s second round of voting. Fresh polls showed the far-right National Rally (RN) party and its allies were still in the lead but looked to fall short of getting an outright majority.
The UK national election on Thursday propelled the Labour Party to a sweeping victory, and Labour leader Keir Starmer became the next Prime Minister. In the six-week election campaign,
The latest update indicates that Labour has won 411 seats, and the Conservatives have secured 121 seats. This gives Labour a massive majority in the House of Commons. One seat has not yet declared a winner.
Actually, though this was a vote against the Tories, while the share of the vote Labour got hardly moved, and was in fact lower than in recent elections, votes went to the right in the form of Reform, or to the Liberal Democrats, Greens and other parties – and Labour was unseated in a couple of spots as a result of this, and in the light of their stance on Gaza.
As Sky put it, A thumping majority without a thumping share of the vote’. Chief Pole analyst John Curtice said “Actually, but for the rise of the Labour Party in Scotland… we would be reporting that basically Labours vote has not changed from what it was in 2019”. Roughly one third of the votes and two thirds of seats shows the problem with the first past the post system, with turnout (which is not compulsory) below 60%. Labour is pretty centralist and conservative.
Starmer did not win because Britain was hankering for a social-democratic government. He did not win because his Albanese-style small-target strategy appealed to voters. He won merely because he wasn’t the government. Starmer won because Labour was not the Tories. Prime Minister Rishi Sunak’s government was stale, tired, divided, regicidal and largely directionless, sapped by eight years of post-Brexit chaos.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
Markets Higher As They Hang On For Rate Cuts (Again), While Voters Vote Against Incumbency.
This is our weekly market update, where we start in the US, cross to Europe and Asia, and end in Australia, while covering the main points in commodities and crypto along the way.
This past week has been a doozy, with US markets still clawing higher on increased rate cut expectations, as the latest employment data and adjustments posed some important questions alongside a weakening the dollar, while in the UK the incoming Labour Government won with a whopping seat majority despite voters really voting against the Tories rather than for Starmer.
In France, horse trading ahead of Sundays second pole could mean the Right do not get the prize they were expecting, while Oil was firmer across the week on fears of middle east conflicts and in Crypto, Bitcoin has dropped more than 20% from recent highs.
Wall Street stock indexes closed firmer on Friday, with the tech-heavy Nasdaq and benchmark S&P 500 hitting record highs.
All up, the Dow Jones Industrial Average rose 0.17%, to close at 39,375.87. The S&P 500 gained 0.54%, at 5,567.19 and the Nasdaq Composite advanced 0.90%, to 18,352.76. For the week, the S&P 500 gained 1.95%, the Nasdaq rose 3.5% pct, and the Dow climbed 0.66%. The Russell 2000 Small Cap index is down 0.95% for the week and the S&P500 equal weight was parallel to its 2022 high, showing the narrowness of the support for the all time highs on the S&P500.
French financial markets have come under selling pressure since President Emmanuel Macron called for a snap election last month, with concerns that a far-right win could add to worries over fiscal sustainability. But there is also nervousness about what will happen if there is no clear winner in Sunday’s second round of voting. Fresh polls showed the far-right National Rally (RN) party and its allies were still in the lead but looked to fall short of getting an outright majority.
The UK national election on Thursday propelled the Labour Party to a sweeping victory, and Labour leader Keir Starmer became the next Prime Minister. In the six-week election campaign,
The latest update indicates that Labour has won 411 seats, and the Conservatives have secured 121 seats. This gives Labour a massive majority in the House of Commons. One seat has not yet declared a winner.
Actually, though this was a vote against the Tories, while the share of the vote Labour got hardly moved, and was in fact lower than in recent elections, votes went to the right in the form of Reform, or to the Liberal Democrats, Greens and other parties – and Labour was unseated in a couple of spots as a result of this, and in the light of their stance on Gaza.
As Sky put it, A thumping majority without a thumping share of the vote’. Chief Pole analyst John Curtice said “Actually, but for the rise of the Labour Party in Scotland… we would be reporting that basically Labours vote has not changed from what it was in 2019”. Roughly one third of the votes and two thirds of seats shows the problem with the first past the post system, with turnout (which is not compulsory) below 60%. Labour is pretty centralist and conservative.
Starmer did not win because Britain was hankering for a social-democratic government. He did not win because his Albanese-style small-target strategy appealed to voters. He won merely because he wasn’t the government. Starmer won because Labour was not the Tories. Prime Minister Rishi Sunak’s government was stale, tired, divided, regicidal and largely directionless, sapped by eight years of post-Brexit chaos.
The US markets are closed Thursday, on July 4th, but there were a couple of significant developments across Oil and Bitcoin nevertheless this week.
Firstly, Bitcoin The world’s biggest cryptocurrency took little support from weakness in the dollar, which fell amid increased bets on interest rate cuts by the Federal Reserve, as the Bitcoin price fell sharply to a two-month low on Thursday, breaking past a key support level thanks to uncertainty over several points of selling pressure, chiefly defunct exchange Mt Gox, saw traders remain averse towards the token. Broader crypto prices also followed Bitcoin lower.
Elsewhere, Oil prices fell from two-month highs in Asian trade on Thursday, as traders collected some profits from a strong run-up this week, while soft U.S. economic data raised some concerns over long-term demand.
But prices were still relatively buoyant after a substantially bigger-than-expected drawdown in U.S. inventories, while persistent conflict in the Middle East also kept a risk premium in play.
While the volatility in Bitcoin might be considered a side-show, the recent moves higher in Oil are more significant, and if held, will translate into higher prices and inflation down the road. The current geo-political uncertainties and electoral uncertainties are haunting markets, even though the NASDAQ hit another high. Something will need to give, eventually.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
The US markets are closed Thursday, on July 4th, but there were a couple of significant developments across Oil and Bitcoin nevertheless this week.
Firstly, Bitcoin The world’s biggest cryptocurrency took little support from weakness in the dollar, which fell amid increased bets on interest rate cuts by the Federal Reserve, as the Bitcoin price fell sharply to a two-month low on Thursday, breaking past a key support level thanks to uncertainty over several points of selling pressure, chiefly defunct exchange Mt Gox, saw traders remain averse towards the token. Broader crypto prices also followed Bitcoin lower.
Elsewhere, Oil prices fell from two-month highs in Asian trade on Thursday, as traders collected some profits from a strong run-up this week, while soft U.S. economic data raised some concerns over long-term demand.
But prices were still relatively buoyant after a substantially bigger-than-expected drawdown in U.S. inventories, while persistent conflict in the Middle East also kept a risk premium in play.
While the volatility in Bitcoin might be considered a side-show, the recent moves higher in Oil are more significant, and if held, will translate into higher prices and inflation down the road. The current geo-political uncertainties and electoral uncertainties are haunting markets, even though the NASDAQ hit another high. Something will need to give, eventually.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
This is our weekly market update, where we start in the US, cross to Europe and Asia, and end in Australia, and we also cover commodities and crypto, as I get my ideas straight for the next leg of the year. In essence, AI has driven markets hard, especially in the US, but market breadth is narrow, and risks remain elevated.
Shares in New York ended lower on Friday, reversing modest opening gains after the latest inflation data showed that the disinflation narrative was intact, widening ever so slightly the door to a pivot to rate cuts. So an early rally fizzled as investors digested in-line inflation data and weighed political uncertainty after the U.S. presidential debate where the shaky performance from U.S. President Joe against Donald Trump has just ratcheted November’s U.S. election uncertainty up substantially.
Data showed U.S. monthly inflation was unchanged in May, an encouraging development after strong price increases earlier this year raised doubts over the effectiveness of the Fed’s monetary policy. The Commerce Department report also showed consumer spending rose marginally last month, fueling optimism that the U.S. central bank could engineer a much-desired “soft landing” for the economy.
There was a late wave of selling the magnificent seven, with a 3 per cent tumble in Meta. Amazon, Alphabet, Apple and Microsoft each closed more than 1 per cent lower though Tesla edged 0.2 per cent higher.
Wells Fargo noted that upcoming events, such as the November elections and potential delays in disinflation, may cause episodes of market volatility in the months ahead. Worth reflecting again on the fact that thirty percent of the S&P’s returns this year have come from Nvidia alone. It was now the most expensive stock on the most expensive market in the world and the Magnificent 7 accounts for 71% of the S&P 500 Index’s year-to-date return. Tightrope time?
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
From Here, Where? As Uncertainty Haunts The Markets!
