Tech on steroids: AI the savior, or?
2000 ratio is at an all-time high High-tech stocks are doing better than ever, and Hartnett says it's time to invest in them.
Hartnett's quote of the Week: "I mean if you are going to lose your jobs and be replaced by AI within the next few year, why not own some AI for a hedge?
Tech is King
As of this writing, the NASDAQ/Russell Ratio is continuing to squeeze and trading at another record high level.
Source: Refinitiv
SOXuberance
What will happen if the semis squeeze mood spreads?
Source: Refinitiv
Spot up, Volatility Up kicks in
Do we now see the beginning of the next phase in the tech meltup, where those who are underweighting tech begin to bid up calls to gain some "desperate exposure" to tech? VXN going up on Friday isn't your usual volatility behavior.
Source: Refinitiv
You must have technology
Zoom out to see that we're still a long way from the August 2021 and late 2020 must-have tech options mania, although we can already see the first signs.
Source: Refinitiv
The huge SPX Short
The SPX spec is indeed very short. However, as we have explained on numerous occasions, this short has offsetting positions. The NASDAQ long is one of these. You can understand the dynamics of this market by comparing the spec NASDAQ – SPX positioning with the NASDAQ/SPX Ratio.
Source: Refinitiv
The return of hate
The crowd loves puts when local markets are low, and hates them when local markets are high. Here, put hatred is in style again...
Tradingview
Yields popping Bubbles
Hartnett's Friday poetry: "4% real rates popped the internet bubble, 3% subprime and crypto crashed when real yields went from -100bps up to 150bps. But the market is telling you that real rates will need to increase another 100-150bps to pop AI's "baby bubble".
Source: BiofA
Can AI reduce the rate-dependence of tech?
MSCI World Value and Growth P/E.
Source: Macrobond
AI adoption: The 10 year macro-case
GS Global economists estimate that widespread AI adoption can boost global productivity growth by 1.4pp per year over a 10 year period.
Source: Goldman
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