Divergence and its impact on the market: Stocks in Translation

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Nvidia Nouvelles

Stock Market,Jared Blikre

Major US Indices (^GSPC, ^DJI, ^IXIC) have seen a rally with tech leading the charge in the past several months. One of the top stocks leading is Nvidia...

) have seen a rally with tech leading the charge in the past several months. One of the top stocks leading is Nvidia with Wall Street abuzz with any and all plays related to AI.

When we talk about rotation in the markets, we're just talking about other sectors, kind of stepping up to the plate here. Pulling back a little bit as we take this show S and P 500 within a percent or two of an all time high.Correction in time versus correction and price.You used to be a direct market maker down at the New York Stock Exchange where you were also a floor governor and uh just talk to us about maybe the market that you would make for some of these small cops.Um II I think what, what is going on underneath the surface is fine.

You have to look at these individual companies, how they're performing, how the consumer is treating them.Uh And that is what's driving the stock market. So when they have to do their everyday chores, their groceries, which have not come down in, you know, any, they never come down.You know, my, my box of girl scouts, the girl scouts started this shrink, by the way, we thin mints.I will start that war and I will die on that hill.

So II I think education shows like this uh help people that don't understand some of the things that people like myself have been engrossed in for 32 years and just talk like it's our everyday common language.We were just talking about some of the head scratching moves in the market and we didn't quite get to our word of the day divergence, although you did touch on it and I just want to kind of break that down.

All right, something is changing and when you see relative strength, how well one stock is doing relative to its peers and all of a sudden it's doing a little worse, doing a little better.The tide is not lifting all boats and we have to be a little one more selective and two maybe defensive at times.And when it moved, it moved quickly.

So their debt will increase uh for the older investors, they may take money out of equities because a 5% yield is safer.I don't need the risk of the headlines that are going on during an election cycle.But when you get used to where the yields are, uh some of these mega cap companies are able to shake that off, they're ok.

Historically speaking, when I talk about that, I talk about going back to the.com when Cisco Intel Microsoft were like 90 times earnings.Uh So right now, yes, it is alarming and it's a narrative that uh you know, a bear would definitely cling onto but how those bears been cleaning, they're falling like crazy.

Uh just to hold it in their own investment accounts and they don't have to worry about custody and all these things. I got to go down there during the nineties is when I started and um it was a different, you know, it was kill or be killed.Uh That is not really what we do with our interns or our young staff.But uh you know, we usually buy it for them.

 

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