Note: Silicon Valley insider Jeff Brown says what’s coming in the next 90 days could be 12X bigger than the entire dot-com boom.
He’s calling it a “Hyper Acceleration” – and he says tech billionaires are betting everything on it. Jeff Bezos, Mark Zuckerberg, Bill Gates are all making massive bets on the exact same trend.
Jeff is sharing the complete strategy TONIGHT at 8 p.m. ET, and attendance is free. Secure your seat immediately by clicking here.
This mega-rally has been one heck of a ride. Folks who dived in head-first have made some eye-watering gains.
Of course, profits are always welcome. However, this runaway market has bred a level of complacency that concerns me. It could be setting people up for some serious pain.
To appreciate the amount of froth in the market right now, you only need to consider the recent initial public offerings of Circle (CRCL) and Bullish (BLSH)…
When BLSH went public, it listed at $37… and topped out at $118 on its opening day. But it has since fallen back to just over $60, less than a week later.
CRCL peaked at just under $300 in June, but it recently fell through the $150 level.
It shows that there’s a whole lot of speculative money swirling through the markets, chasing unrealistic gains.
And much of it is built around false narratives…
The AI Bubble Could Pop
One of the major narratives driving the market has been the huge artificial intelligence (AI) boom. That’s been a pervasive theme for several years.
Companies are spending big on the latest Nvidia chips, driving NVDA’s valuation sky-high, as one example. But I’m not convinced that many AI companies can convert billions of capex dollars into hard cash.
OpenAI CEO and billionaire tech investor Sam Altman shares that concern…
Sure, he believes that AI is one of the most important developments in tech. But even he recently stated that he thinks it’s in a bubble. He’s concerned about the speculative money flooding the sector… even likening it to the dot-com bubble.
As he put it, “When bubbles happen, smart people get overexcited about a kernel of truth.” And that’s what we’re seeing now…
Tech is often a zero-sum game. If all your competitors are investing heavily in AI, you need to spend just to keep up. But there’s no guarantee that it will deliver any extra profits.
And there are other popular narratives in the economy that could soon face some hard truths…
|
Tune in to Trading With Larry Live Each week, Market Wizard Larry Benedict goes live to share his thoughts on what’s impacting the markets. Whether you’re a novice or expert trader, you won’t want to miss Larry’s insights and analysis. Even better, it’s free to watch. Simply visit us on YouTube at 8:30 a.m. ET, Monday through Thursday, to catch the latest. |
Rate Cuts Aren’t Set in Stone
This past week, the Dow Jones joined the Nasdaq and S&P 500 in taking out its all-time high. That came as volatility was right around its 2025 low.
It was also against the backdrop of a likely 0.25% rate cut when the Federal Reserve next meets in September. The odds of that cut have dropped from 90% to 80% over the past week or so. Yet the market still has the cut baked in… not to mention the prospect of more rate cuts as we go.
It will be more of a surprise if the Fed doesn’t cut in September. Yet the market is completely ignoring inflation. Investors have convinced themselves that it’s something from the past.
Last week, we saw the core Consumer Price Index (CPI) rise slightly higher to 3.1% (year-over-year). But how anyone could ignore the Producer Price Index (PPI) reading is beyond me. It was one of the worst inflation numbers I’ve seen in years.
July’s month-over-month (MoM) PPI came in at 0.9%. That came against expectations of 0.2% and a 0.0% MoM reading in June. It was its highest reading since June 2022. Yet the market somehow just took it in its stride.
Companies can’t keep absorbing higher costs. Eventually, those PPI numbers will show up in consumer prices. And that will take further rate cuts off the table.
Right now, the market is shrugging off that PPI print and the potential for inflation to bounce back. It’s the same thing with other concerns about the economy…
Companies still don’t know how to plan for tariffs. And that’s influencing their decisions around hiring.
We’ve recently seen some soft nonfarm payrolls (NFP) numbers with huge revisions down for previous months. The key to watch out for now is rising unemployment and jobless claims.
That’s why you need to remain especially cautious right now and consider banking some profits. Don’t get lulled into a false sense of security.
Remember that markets always look to the future.
A slowing economy, coupled with rising inflation and slowing jobs, could soon test a market that’s priced for perfection.
And that could set off a sharp and nasty fall…
Happy Trading,
Larry Benedict
Editor, Trading With Larry Benedict
|
Free Trading Resources Have you checked out Larry’s free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just click here to check it out. |