Everybody knows it but nobody is giving it any serious consideration: the entire market is being driven by Nvidia, Apple and even GameStop. And when one, if not all three of these names starts to experience some selling, they are likely taking the whole market with it.
I have been making note of the fact that Apple and Nvidia could be the market’s black swans for the better part of a year now. And forget about cash on the sidelines eventually drying up as a result of savings running out, the market is also not taking into account multiple looming red flags for these names.
Zero Hedge has been all over the story of “bad” market breadth that no one on Wall Street seems to want to notice or talk about out loud. They wrote on X today:
Forget about the Mag 7: it's all about the Top 3 where it is now daily race who can buyback the most stock pic.twitter.com/VW03jEAs99
— zerohedge (@zerohedge) June 14, 2024
For Apple, the company remains in the crosshairs of a massive antitrust investigation, the likes of which threw a cold blanket on Microsoft for the better part of a decade in the early 2000s. This is a very real risk that looms under the surface of the company’s buybacks, which are likely a large portion of the bid now. The company’s most recent ‘innovation’, the Vision Pro has also all but disappeared from public discourse after receiving tepid reviews.
Also, Apple and Nvidia share something in common: their valuations, at 33x and 77x ttm earnings, respectively, are extremely aggressive. There is a far better case for an air pocket under these valuations than there is over them. So on top of 5.5% rates, bone dry consumer savings, record high credit card debt, unmarke
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