Momentum Monday – The S&P Is At All-Time Highs And Nobody Is In The Mood To Celebrate Which Is Bullish !

Howard Lindzon Howie Town

7 hours ago

4 MIN READ

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Good evening…

Let me catch you up on what is in today’s episode below:

I shared a bunch of new ideas that are AI adjacent/infused (financials, Instacart, Airbnb, genetics, biotech).

I am all for and focused on AI infused businesses going forward. The direct AI mania is very crowded and complicated.

As for the long confusing story…

Global warming …bullish (not for the Italian parmesan cheese market)

Communism in America….bullish

Hunter Biden and Tucker Carlson best pals…bullish

Interest rates creeping higher…bullish

Strait of Hormuz closed…bullish

South Koreans implode themselves with leverage…bullish

Tariffs …bullish

New World Order…bullish

Trump gains 50 more pounds grifts $2 billion…bullish

The headlines – and a lot of awful people hoarding the attention of the people writing the headlines – have created a misery that has masked the fundamentals of an S&P 500 posting record earnings and operating margins.

Of course, tops happen from all-time highs of course, but most often we get more all-time highs. The ‘top’ argument would go something like this…’in a healthy capitalist society, these high profits and margins would be something startups would be gunning for and also that these record profits and margins in general are just going to be hard to match going forward’.

I hope you enjoy the episode…

Welcome back to Momentum Monday!

In today’s episode of Momentum Monday, Ivanhoff and I discuss the following:

Market Overview: Earnings Growth vs. AI Selloffs
Gold and Hard Assets Bounce Back
Rotating Beyond Tech: Financials, Genomics, and Biotech
Under-the-Radar Trends: Consumer Brands, Travel, and Storage
Boring Businesses, Energy, and Macro Observations
Breakout Spotlight: Revolution Medicines ($RVMD ( ▲ 0.89% ) )

In This Episode, We Cover:

Market Overview: Earnings Growth vs. AI Selloffs (0:00)
Gold and Hard Assets Bounce Back (4:39)
Rotating Beyond Tech: Financials, Genomics, and Biotech (6:00)
Under-the-Radar Trends: Consumer Brands, Travel, and Storage (8:17)
Boring Businesses, Energy, and Macro Observations (12:28)
Breakout Spotlight: Revolution Medicines ($RVMD ( ▲ 0.89% ) ) (16:20)

Here are Ivanhoff’s Thoughts

The SP500 followed through and made new all-time highs last week. The reason is not that the Fed hasn’t increased interest rates in the face of high and rising inflation. It is not that there might be another peace agreement in the Middle East – the last one lasted only a couple of weeks. Almost 90% of the S&P 500 have already reported, and the index is on track to more than 50% year-over-year earnings growth. The question is how much of that is already priced in?

Not everything was roses and rainbows last week. Memory leaders WDC and SNDK absolutely crushed earnings estimates and still sold off harshly, reminding us that the sentiment in some AI areas is still sour. One of the cybersecurity leaders, DDOG, also beat estimates and declined 20%. In all of those cases, the market had already priced in the good news. The true earnings surprises are reflected in the market reaction. CRSR gained 35% and finished near its daily highs. SHOP and TWLO gapped up 20% and finished near their weekly highs. The same with PLTR and TEAM.

The jobs report came well below estimates -23k vs expected 85k. Counterintuitively, this might be good news for the stock market because it reduces the chances of a rate hike later this year. The Fed had a dual mandate – under 2% inflation and full employment. The latter is more important, especially in an election year. Maybe this is why we finally saw metals to wake up. The week was strong for gold, silver, copper, and steel, which benefited from the latest sector rotation.

From a 10,000-foot view, the indexes just had a high-volume range expansion followed by a few days of sideways consolidation. People are looking for more risk – stocks in highly speculative areas like space, nuclear, solar, AI applications, rare earth metals, etc., are bouncing.