U.S. equity markets are beginning to feel downright frothy as investors chase the rally and pile into some of the most speculative companies. While equity markets began the year with broad gains, performance has narrowed in recent weeks. Recent hard economic data has come in weaker than expected, as tariffs begin to bite. What’s going on with the U.S. Dollar? Hyperscaler capex. Buy high, sell higher?
1. Retail activity is approaching levels last seen in the 2021 meme-stock craze:
2. But it’s not just retail:
3. Unprofitable technology companies are screaming higher:
4. The drawdown for the median S&P 500 stock is trending in the wrong direction:
5. Last Tuesday was notable for being the smallest decline in the S&P 500 on a day when over 400 of its constituents traded lower, with data going back to 1997:
6. Despite the disappointing hard data, soft data has improved recently:
7. Recent Consumer Price Index (CPI) data showed price hikes in industries most directly affected by tariffs:
8. Recently, the Dollar has been marching to the beat of its own drum after years of realizing a consistently negative correlation to equities:
9. Speculation that weakness in the U.S. Dollar was caused by fleeing international investors turned out to be just that:
10. Big tech is becoming the most capital-intensive industry in the world:
11. Simple comparisons to the past should be taken with a grain of salt, but we believe that the price that you pay will matter for long-term returns:
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