I’m sorry but this market is just getting more and more ridiculous (and I’m saying that as someone whose risk-on signals have been exposed to equities for the last 3 weeks).
Blowout jobs data!
Did we forget that for months, economists have revised down every initial jobs report?
Incredible bull market!
Did we forget that 84% of the stocks in the Russell 3000 are still trading below their respective 2021 peaks?
No credit event!
Did we forget that we have TRILLIONS of dollars of debt that needs to be refinanced starting this year into next?
AI is the next industrial revolution
Are we ignoring that today’s AI is just more advanced regression analysis that has been done for years prior to ChatGPT?
I get it. I said at the start of last year that 2023 would have a melt-up rally but that a credit event was likely toward the end of the year due to the lagged effects of the fastest rate hike cycle in history. Sure, I was wrong on my timing. But how can you deny just how disconnected the market is from the narrative when looking deeper beneath the surface?
A lot of people have made a killing from the Magnificent 7 stocks. My problem isn’t other people making money. My problem is that the vast majority of stocks are still underperforming. According to FactSet, the Magnificent 7’s combined market capitalization is larger than every single country’s ENTIRE stock market, except for the U.S. itself.
The Bottom Line
How the hell does any of this end well? How the hell is this some bull market when it’s literally the entire world cheering the widening of the wealth gap that’s happening between mega-cap technology stocks and nearly every single other public company in existence right?
I still think we’re all in a lot of trouble, and time will prove my original analysis (largely) right. All bubbles end. This one is no exception.
On the date of publication, Michael Gayed did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
