Last night I shared this subscriber update right before today’s sharp #stockmarket 📉move:
“If rates follow the higher-for-longer path I expect, these long-duration stocks are on a collision course with the one force they can tolerate for a while (especially in a mass psychological frenzy), but eventually get crushed by: higher interest rates.”
The most exposed? Exactly the long-duration AI/tech names that have led the rally.
Here’s how it played out today:
• 2-yr yield +10 bps
• Nasdaq-100 -4.75%
• Technology sector (XLK) -6.66%
• Semiconductors/SOX -10.3%
• Memory Chips (DRAM) -15.2%
• AI/Tech (AIQ) -8.15%
• AI Infra. (ARTY) -9.9%
• Software (IGV) -4.2%
• Cloud Computing (SKYY) -4.9%
• Mag-7 (MAGS) -3.8%
Markets shift fast when regimes change. Staying on top of these dynamics is everything right now.
#FinTwit #AIStocks
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@MichaelPBento These 2 months we are going to see a historical selloff… the lack of shorts and volume shows that there is not much floor below and gaps since March will be filled
@SamanthaLaDuc If a company with revenue of 18bil and 5 billion in losses can be valued over a trillion dollars then everyone might as well just throw away their econs books
@WOWSTrade But this mechanical buying doesn’t need news.. it occurs almost everyday.. this whole thing is just like a game and nothing reflects reality.. AI sell off and it’s fomo buying.. blackstone reduce redemption… buy every private credit…