Good morning, investors. This week started with a new record for the S&P 500 index. Given what feels like an endless series of all-time highs, it’s natural to wonder when the next pullback will be.
But now, the fundamentals seem more disconnected from the charts than ever.
You can be bullish on AI and be cautious about AI stocks at the same time.
Chip stock prices have only risen to extreme levels twice in the past 30 years. basic earnings We support a wide range of AI trading.
For the first time since the internet bubble, the PHLX Semiconductor Index (SOX) is trading 36% above its 50-day moving average.
As Bespoke Investment Group highlighted in a note Monday, this has only happened twice: during the dot-com bubble.
Chip strength This pushed up the rest of the index.
The Nasdaq 100, for example, is similarly trading nearly 15% above its 50-day moving average, for the third time in nearly 30 years.
The previous two cases occurred during the Great Financial Crisis and the dot-com crash.
nowViolent price movements do not completely undermine the basic story.
For example, NVIDIA’s full-year earnings are expected to increase by 73%, while AMD and Broadcom’s earnings are expected to accelerate by 75% and 66%, respectively, this fiscal year.
and as daily opening bell covered on monday, micron Despite gaining over 700% over the past year, it still looks like one of the cheapest AI stocks on the market.
meanwhilehyperscaler spending continues to rise, and demand for AI memory and compute outstrips supply.
Tech stocks are actually undervalued based on forward P/E ratios (Graph provided by: Evidence A)
The current caution comes from price trends.
SOX-based semiconductor stocks have risen 69% since the end of March.
The longer such a rally lasts, the more likely it is that a pullback will occur.
A similar move in the semiconductor index in 2009 ultimately led to a generational rally, but only after a period of stability.
Frankly speakingnone of this is intended to quash optimism for AI trade.
Cash flow, capital expenditures and technology have all exceeded expectations.
However, pullbacks are an inevitable risk in any market cycle.
Even a good understanding of new technology does not guarantee timing accuracy.
Quantification of funds is building an actively managed fund that aims to pay weekly dividends from the performance of Bitcoin, gold, and US stocks.
Government prints. Accumulate Bitcoin and Gold.
📊 Inflation data for April is due to be released this morning. Economists expect core CPI to rise 0.4% month-on-month and 2.7% year-on-year. But a key indicator is the housing component, which is likely to be increasing. (Barons)
🚢 President Trump said the Iran ceasefire is being held “on life support.” He said Iran had sent an “unacceptable” rebuttal to the White House’s latest proposal, significantly weakening the month-long ceasefire. (CNBC)
📈 Micron’s rise makes DRAM the fastest ETF to hit $6.5 billion. The fund reached the milestone in just 36 days, faster than the 43 days it took for BlackRock’s Bitcoin ETF IBIT. (Yahoo Finance)
🍻I want more financial news after the closing bell? Trusted by thousands of readers beer market For end-of-day analysis. I will handle shipping in the morning. You can end your afternoon at Morning Brew’s beer market. Sign up for free.
-
Microsoft CEO Nadella said Elon Musk has never expressed concerns about investing in OpenAI (CNBC)
-
Nvidia CEO Jensen Huang reportedly will not accompany President Trump on his visit to China (Reuters)
-
Existing home sales in April increased by 0.2%, lower than expected (WSJ)
-
Intel stock rises after new update on partnership with Nvidia (Yahoo Finance)
-
4 Stocks to Win in the Next Bull Market (full signal)
🗓 May 12, 1933: President FDR signed the Agricultural Adjustment Act, marking the government’s first major intervention to raise agricultural prices and step into commodity policy.
📩 Want to be in front of the 207,000+ investors who receive this newsletter and the 350,000 professionals who can access it in the Bloomberg Terminal? Please reply to this email and tell us why we should cooperate.
ISBG uses Bitcoin, Gold, and Stock options and does not invest directly in Bitcoin, Gold, or Stocks. The use of derivative products involves risks that are different from, and in some cases greater than, those associated with investing directly in securities and other traditional investments. These risks include (i) the risk that counterparties to derivative transactions may fail to meet their contractual obligations; (ii) the risk of mispricing or misvaluation; (iii) the risk that changes in the value of a derivative may not be perfectly correlated with the underlying asset, interest rate, or index; Derivative prices are highly volatile and can change significantly over short periods of time. A Fund’s use of leverage, such as borrowing money or using options to purchase securities, results in additional expenses for the Fund and increases the Fund’s gains and losses.
The Fund may not be suitable for all investors. This Fund is designed for use only by knowledgeable investors who understand the potential consequences of seeking daily leveraged (2X) investment results, understand the risks associated with the use of leverage, and are willing to frequently monitor their portfolio. This Fund is not intended for use by, and is not suitable for, investors who do not intend to actively monitor and manage their portfolios. If the performance of the underlying portfolio is flat for periods longer than one day, the Fund will incur a loss. Additionally, the Fund may incur losses even if the market value of the underlying portfolio increases over a period of time longer than one day. Investors can lose the entire principal of their investment within one day.
There is no guarantee that the Quantify Fund ETF will make weekly distributions, and the amounts may fluctuate from week to week. Distributions may consist of option premiums, dividends, capital gains, and interest payments. To review current and historical monthly estimates of ETF distribution composition, investors can refer to the 19a-1 Notice available on each corresponding fund’s web page. Distributions that are classified as a return of capital reduce an investor’s cost basis in the Fund shares held and may result in higher taxes being paid when the Fund shares are sold in the future, even if the shares are sold at a loss relative to the original investment.
Investments involve risk. There is a possibility of loss of principal. Distributed by Foreside Fund Services LLC.
You should carefully consider a Fund’s investment objectives, risks, charges and expenses before investing.
This and other information can be found on the Funds page within our website (www.quantifyfunds.com). Please read the prospectus carefully before investing.
