CONCENTRATION

Just reporting the numbers that others are reporting but we have confirmed with our rusty abacus. We are open to any and all outcome. We know a lot of what we are seeing has to do with huge spikes in oil and yields and if that changes for the better, the broad market can get better but for this second:

If 94% of the stocks in the S&P 500 went to ZERO leaving only the highest market cap stocks (top 6%) the index would still trade at 4400. We estimate that the other 470 stocks are 3300 of the S&P points. Again, those 30 stocks are 4400 points, quite unreal.

The “AI Big 10”, the Magnificent 7 plus Broadcom, AMD, and Micron, now accounts for 41% of total US stock market capitalization. It is being reported this puts today’s AI concentration within the range seen at the peaks of some of history’s largest market bubbles. The 2000 Dot-Com Bubble peaked at 41% of the US market cap.

The S&P 500 is 0.7% below a record high, yet 430 of those stocks are 21.7% below their highs with approximately 300 of the S&P 500 stocks are, on average, 24% below their highs. Breadth has only been this bad twice, in January 1973 and in 1999/2000. You probably don’t want to remember what happened after.

There were more than 1,000 total new yearly lows on the NYSE and NASDAQ twice in recent days…again, while the S&P not even down 1% from the highs. There have been more than a couple 3-1 negative advance/decline days.

The 2 largest S&P 500 companies, Nvidia and Apple, now account for 15% of the index’s market cap, an all-time high.

Anthropic and OpenAi now have $2.5 trillion of off balance sheet debt. That’s $2.5 trillion and that’s off their balance sheet? We would like lax accounting regulations like that. WE ARE BIG TIME WORRIED ABOUT ALL THE DEBT AS WELL AS THE CIRCULAR CRAP!

There are many that are very, very worried about all this. A look at 73 and 99-00 and just think the number 50 and that’s percent. Of course, there has been a cause and effect from oil and yields in this recent weakness and one could ask if that changes, will the bottom pick up? We’re all for that but so far, nothing doing. Many believe when oil comes down, yields will also. Let us state loudly, THEY HAD BETTER. Quite the worry is that there is $365 trillion of global debt, a ton of government debt in bigger nations with our great country that has been run by politicians that have, to be kind, fibbed about doing something about it and now we are running $2 trillion deficits while they have shown they do not give a crap. The question is are we finally to the point where the bond market finally shoots a certain finger at all this?

So we’ll watch yields and oil and watch them big indices and them big stuff. If they decide to croak, we will know it and will deal with it. In order for the big indices to be in trouble, they first have to break BELOW the all-important 50 day moving average. If the big stuff keeps on keeping on, that’s fine. In fact, the NASDAQ, NDX and the S&P are a stone’s throw from the highs. A good day would amazingly break them out in spite of the underlying. We are ready for any and all outcomes but again, to be blunt, if they come after the bigs…

Driving the bus are NVIDIA (announces big addition to buybacks this morning, APPLE, MICROSOFT, GOOGLE (dont like the name change), FACEBOOK (don’t like the name change), AMAZON and let’s add SPACE X and TESLA. Others, previously mentioned are AMD and MICRON. Do notice all are tech-related!