Big Gains In An Unsure Market
The last 48 hours have represented a big surge in the markets. But before I jump into today, I want to share something with you that happened yesterday that’s been swept under the rug for the most part…
As you likely already know, stocks were booming yesterday morning. But what most folks don’t know is that the Fed accidentally released its inflation data 30 minutes early.
Now typically consumer price index (CPI) data is released at 8:30 am. However, the files were uploaded to the Bureau of Labor and Statistics website 30 minutes early (at around 8 am).
US stock-index futures jumped, and Treasury yields fell immediately after media outlets including Bloomberg News reported the official CPI data at 8:30 am.
The S&P 500 ended the day at an all-time high.
But the “experts” are saying that there were no major market movements in the half-hour stretch between the early data release and the scheduled release. And they think that the accidental early release went unnoticed by investors.
Unfortunately, it’s impossible to know whether or not the early release helped to push capital into the markets early given that the release always comes 1 hour before the markets officially open at 9:30 am Eastern time.
But what I can say is this: All the major indices closed at record highs yesterday. The S&P is now up 12% for the year, the Dow is up 6%, and the Nasdaq Composite is up 13%.
Tech is a Major Driver
Now this brings me to what I want to discuss today. Last week, I asked if everyone thought that tech would continue to lead the markets… and most said no.
But on the back of an incredibly bullish week, tech is up big with XLK rising roughly 4% this week.
So once again we are seeing tech leading the week on the backs of the big names like Apple (AAPL), Nvidia (NVDA), Intel (INTC), Broadcom (AVGO), and a slew of others.
This points to something I have been telling you since last year:
I don’t fully trust this market. I’ve been constantly beating the drum on how crazed this market truly is, how we have no set metric for value anymore, and how capital is rushing from place to place in ultra-short cycles.
If we get a collapse, it could be UGLY…
But until then, if we’re going to see a melt-up towards higher and higher highs, then I believe tech will continue to lead the way.
I just don’t see a scenario where the Magnificent 7 falls apart and the market carries on. Maybe for a week or two… But certainly not for a year or two.
That’s why my biggest position (as I shared on Roundtable a few months ago) is still simply holding the QQQ.
And over time I have just blended in some more Gold, Utilities, and Energy into my portfolio.
But the last two weeks show us what we’ve known all along: The real engine behind a soaring bull market is the tech sector in today’s stock market.
Take the Magnificent 7 for example. For the last year, they are up:
- Nvidia +227%
- Apple +10%
- Microsoft +36%
- Google +49%
- Amazon +66%
- Meta +98%
- Tesla +5%
Some of these positions account for the biggest gains across the board in the S&P. So if you’re going to continue betting on bullishness until the market proves otherwise (like I am), I’d suggest that tech will be the biggest winner as long as the bull market prevails.
If tech collapses… Well, I think the market itself is in for a massive correction. But as of right now, it’s full steam ahead.
If you think it feels too aggressive to be “All In” on tech during a high-flying market, please know that I am not all in.
While my biggest single position is in the NASDAQ, a huge combined chunk of my portfolio remains in the Ultimate Dividend Stocks I use to pay me as I hold them.
To your success,
— Nate Tucci
