Mag 7 forward P/E has dropped from 32 to 25.8 in one year, while the other 493 stocks have stayed remarkably stable around 20. The valuation gap is closing fast.
Nice simple layout showing how much the S&P 493 need to gain to offset Mag 7 losses. SPX doesn't need the Mag 7 to push above 7,000 — but it probably needs them to stop declining.
The NYSE High-Low Logic Index just printed above 7 — meaning tons of stocks making new highs AND new lows simultaneously. Every prior spike above this zone came before stress in price.
After 60 years of watching markets: financials traditionally lead new market moves, energy traditionally comes last. Both are surging now — what does that signal?
Breaking today: Amazon posted $717B in annual revenue, surpassing Walmart's $713B for the first time ever. Walmart held that crown for over a decade. AWS and advertising did the heavy lifting.
Walmart Costs More Than Amazon (Per Dollar of Earnings)
Walmart trades at 44x earnings. Amazon's forward P/E is ~29x. Let that sink in: the world's biggest brick-and-mortar retailer is 50% more expensive than the everything store. Investors paying a massive premium for groceries over cloud computing.
A brick and mortar retailer at ~53x earnings. NVIDIA trades at 46x. Microsoft at 25x. The S&P 500 Tech sector averages 37x. Costco is 39% above its own historical average. Rotisserie chickens priced like AI chips.
Just 31 trading days into the year and ETFs have already attracted $253B in inflows — 40% above this point last year. For context, average full-year ETF inflow through 2020 was only $244B.
Retail daily net notional is running nearly 60% above last year and 25% above the 2021 peak. This isn't a few hot sessions — the activity has been persistent.
IGV (software ETF) sits near liberation day lows, yet call open interest vastly exceeds put open interest. Bulls betting on a bounce even as software gets crushed — classic contradiction.
Source: Danny Kirsch - Piper Sandler Options
Everyone's Short VIX. What Could Go Wrong?
VIX futures positioning is near peak net short — a crowded trade. Combined with risk control strategies at elevated equity exposure, this sets up a potential volatility squeeze if anything goes wrong.
Source: Danny Kirsch - Piper Sandler Options
Fund Managers Drunk on Optimism
Global Fund Manager Survey sentiment at highest since June 2021. Uber bullish. Stock vs bond overweight is the most since Feb '22.
