The market's recovery has been truly historic:
The S&P 500 has rallied +20.4% over the last 41 trading sessions, its third-best run this century. During the same period, the Nasdaq 100 has risen +27.3%, its third-biggest rally since 2002.
Only 2020 and 2008 haven seen such sharp recoveries over the last two decades. As a result, the S&P 500 and the Nasdaq 100 are now trading just 2.1% and 1.8% from their all-time highs.
We have gone from a historically weak to a historically strong market in a matter of days.
Global equity markets are currently experiencing their second most expensive year in history based on the market cap-to-GDP ratio. The only time valuations were higher was in 2021, at the peak of the market. Today, this metric sits 7 percentage points above the levels seen at the height of the tech bubble in 2000. It's important to note that US equities — comprising nearly 60% of global market capitalization — are by far the largest contributor to this elevated valuation. https://x.com/TaviCosta/status/1932528238560997412
Retail investors' purchases of Big Tech are slowing: The 10-day moving average of retail purchases of the Magnificent 7+ stocks as a % of total retail inflows just fell to ~12%, the lowest since the start of the 2022 bear market. The Magnificent 7+ basket includes Apple, Amazon, AMD, Alphabet, Meta, Microsoft, NVIDIA, Netflix, and Tesla. This share has declined by ~24 percentage points over the last 2 months. To put this into perspective, an all-time high of 42% was recorded in January 2023. However, retail investors are still heavily invested in technology stocks overall. Retail is simply cashing in some profits. https://x.com/KobeissiLetter/status/1932557384553046281
This is historic:
The market value of the US bond market has fallen to just 68% of the stock market’s value, the lowest ratio since the 1970s. This share has HALVED in 14 years as stocks have widely outpaced bonds. To put this differently, the US stock market is now 50% larger than the bond market. Since the beginning of 2020, the total market value of all publicly traded US corporate equities has skyrocketed $38 TRILLION, or 69%. Over the same time period, the value of total debt securities has risen by $17.8 trillion, or 40%. The US stock market has never been more dominant. https://x.com/KobeissiLetter/status/1932421131547316423
