A summer Friday on the floor of the New York Stock Exchange...

Robinhood continues to do pretty well. Its clients, less so. The firm grew revenue and operating earnings 32% vs. a year earlier. Transaction-based revenue alone was up 44%. Yet excluding the contribution from "event contracts" - largely sports bets - annual transaction-revenue growth was 15%...

Another wrinkle to the Warsh hive invoking Greenspan's "let it ride" stance as the late-'90s tech boom flourished: This benign restraint followed Greenspan's aggressive and intentionally surprising 1994 tightening campaign, which crashed the bond market and established his inflation-vigilance cred.

Michael Santoli@michaelsantoli.bsky.social · last wk.

Fed Chair Warsh has invoked a tech-productivity miracle as cover to keep rates low, invoking the '90s Greenspan era. Yet much more than tech drove the '90s disinflationary boom: Fiscal conditions, demographics and globalization all helped. These are all pushing the other direction now. New column.

Semis try to bounce off their first contact with the 100-day moving average in nearly four months. Pretty symmetrical stampede higher and lower since early May. Enough for now?

Fed Chair Warsh has invoked a tech-productivity miracle as cover to keep rates low, invoking the '90s Greenspan era. Yet much more than tech drove the '90s disinflationary boom: Fiscal conditions, demographics and globalization all helped. These are all pushing the other direction now. New column.

Elevated energy prices, AI capex binge puts the Fed and Kevin Warsh in a tough spot

Fed Chairman Kevin Warsh and many of his devotees have argued that some short-term price pain can be tolerated in anticipation of AI eventually suppressing inflation.

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Back in the days before smartphones, when people had to stand on city streets and look up at buldings to get their news. The Dow's annualized total return since then has been about 10%, just as I (probably) said it would be...

Carl Quintanilla@carlquintanilla.bsky.social · 3w ago

24 years ago today. Times Square Jumbotron. Dow 8665. 📈 @michaelsantoli.bsky.social @cnbc.com

Can earnings growth be too great for the market's own good? Annual growth of 20%+ is unusual in the middle of an economic expansion, and is associated with subpar forward equity returns. Also unusual coming with margins and profit share of GDP at record highs. New column, free with email signup.

Mike Santoli: Why eye-popping earnings expectations have failed to lift the market for two months

The mantra heading into second-quarter results is that another display of stupendous growth of 24% over a year earlier makes equities appear quite reasonably priced.

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Market continues to try to stay on the rails, refusing to overrread Iran headlines, allowing pressure on crowded/volatile semi stocks to dissipate through reallocation to non-tech, holding the broader uptrend - even as erratic flows threaten to knock something loose and the pattern grows indecisive.

Every cycle, it seems, people need to rediscover how markets treat exciting companies that might be over-earning from a generational investment boom relative to a boring one that has been paying dividends steadily for a century.

Carl Quintanilla@carlquintanilla.bsky.social · 4w ago

“.. Nvidia not long ago was one of the market’s hottest stocks. Yet it’s now cheaper than Hershey’s (yes, the chocolate company).” @bloomberg.com $NVDA

Market chatter dwells on structural quirks and mechanical flows the way World Cup talk fixates on officiating and bracket construction. SpaceX entering indexes, tiny flows from "Trump accounts," "systematic" trading triggers, leveraged ETFs. Why all the focus on noise over signals? New column.

There's a lot of 'noise' making it harder for investors to read the true state of the stock market

Rarely has so much attention been placed on the mechanical impact of index inclusion, policy-driven investment flows and options-hedging impact.

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A nice quarter for stocks, divided neatly in halves: Tech-driven rip for six weeks, a peak in Mag7 coinciding with Cerebras IPO, followed by churn and rotation. Hard to fault the overall trend, but many anomalies and extremes show AI stocks threatening to outgrow their index containers. New column.

Mike Santoli: A great first half, but some erratic behavior raises doubts about the rally's integrity

For the past few weeks, the stock market has been attempting to rediscover some equilibrium after a stretch of semiconductor dominance, a breakdown in Mag7 stalwarts and more recently rotation toward ...

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Was May 14 a consequential market moment? (S&P hits 7500, Cerebras IPO surge-and-fizzle, Cisco +14% as traders flail for marginal AI-plays.) As Kevin Warsh implicitly says asset markets have been too calm and strong due to some claimed result of a transparent, proactive Fed... New column.

The big questions the bull market faces right now as the S&P 500 hits some turbulence

Mike Santoli addresses the big questions facing the stock market right now.

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It was great to catch up with Jonathan Boyar for a chat about the market’s reliance on AI, the threat to short-selling as a practice and Ryan Cohen’s bizarre beef with the media over coverage of the GsmeStop meme-stock frenzy. open.spotify.com/episode/3Aa8...

Casino Attached to a Church: Michael Santoli on Speculation, the AI Boom, and Echoes of 2021 and 1999

The World According to Boyar · Episode

open.spotify.com

It was great to catch up with Jonathan Boyar for a chat about the market’s reliance on AI, the threat to short-selling as a practice and Ryan Cohen’s bizarre beef with the media over coverage of the GsmeStop meme-stock frenzy. open.spotify.com/episode/3Aa8...

Casino Attached to a Church: Michael Santoli on Speculation, the AI Boom, and Echoes of 2021 and 1999

The World According to Boyar · Episode

open.spotify.com

My first day back in front of the screens in a week. That's right, fun's over.

Some professional investors who acknowledge that the proposed SpaceX IPO valuation is arbitrary and disconnected from the business as it exists today keep repeating, "But Elon has always made his investors money." Sort of, yes....

Hyper-specific parameters ("When the market is up at least X% over this many days within X% of a record high") combined with narrowly defined time frames ("Strongest two-month rally since X years ago" only looking at calendar months, not all 60-day periods) make this sort of thing very noisy.

it’s me, aubrey plaza accord @sellingtheta.bsky.social · 2mo ago

I’m sure it’s always been like this, but recently it feels like there is so much more data mining for stats to justify a priori market (usually bullish) posture. it’s the Ryan Detrick effect. yes, the natural progression of mkts is upward drift. but you’re n=4 sample size “analysis” is meaningless

First: The burden of proof is on those who insist it *is* 2000 - that we're at the craziest generational peak in a century, set up for the S&P to be cut in half, Nasdaq to fall 75% and negative returns for the next decade. If you believe all that and aren't in cash, do you *really* believe it?

Lou Mannheim@loumannheim87.bsky.social · 2mo ago

Thanks Michael. What's your top reason why it's not 2000?

The market's rising on an array of classic favorable drivers: Fast-rising earnings forecasts, semiconductor leadership, lots of independent movement among stocks, drum-tight credit spreads. When does a pileup of positives become too much of a good thing? New column, free to read with email signup.

Can markets suffer from too much of a good thing?

The market’s extraordinary run to new highs over the past two months has been carried by an array of upbeat fundamental factors and favorable macro conditions.

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Apollo today noting the number of ETFs exceeds that of stocks, as if this is something to fret over. The ETF industry has surely become a gimmicky runaway marketing juggernaut. But from a market-structure perspective it's no great worry. My response below from when indexes first eclipsed equities.

Headline-writing fail here, a "tight job market" is the opposite of a weak one...

So far the needed cooling-off of the AI-hardware theme is being absorbed by fitful churn rather than an urgent rush out stocks. But the scale of AI spend, the market's reliance on it and the potential strain on economic resources and capital markets prompt some big structural questions. New column.

AI stocks helped the bull power through multiple threats. But now is this market too out of balance?

The dominance of the AI theme has grown so extreme that some very large structural questions now seem urgent and compulsory.

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He filed too late? What did Musk think this lawsuit was, notice to the SEC that he'd acquired more than 5% of Twitter?

The New York Times@nytimes.com · 3mo ago

Breaking News: A jury rejected Elon Musk’s lawsuit accusing OpenAI of putting commercial gain over the public good. Jurors decided his claims were barred by the statute of limitations.

The now-ubiquitous idea that "markets always test a new Fed chair" is overstated. Bernanke started early in 2006, a year before the GFC cracks really opened up. Yellen's debut in early 2014 was in a phase of relative macro calm. But somewhat fun that Powell's first day was Volmageddon Monday...

Cisco is the latest old dog of tech learning new tricks, thanks to AI-driven demand for its hardware. The stock has finally overtaken its 2000 peak, set when it was the Nvidia of its day. But its market cap is well below peak becauSe Cisco spent the past 25 years buying back almost half its shares.

Bears: "It's '99, sell tech." Bulls: "It's '99, buy tech." It's a bit like '99 in semi insanity, tech dominance, some erratic vibrations. Unlike it in crucial ways. But of course, we're not guaranteed a phase that mimics that frenzy which preceded a lost decade. New column, free with email signup.

Bulls and bears both believe this could be 1999 all over again. Embrace it or dump your tech stocks?

We are not guaranteed a close rerun of the 1999-2000 extremes. Just because things got crazier then doesn't mean that's ahead of us.

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This should placate everyone, we know how good Americans are at weighing counterfactuals when it comes to allocating blame for inflationary episodes…

This market continues to shift within the AI-buildout theme toward the area of maximum conviction. Which has also meant moving down the value chain from the more sophisticated processors and toward scarce memory chips. Micron is now outperforming Nvidia since the launch of ChatGPT...

Mentioned on air a few minutes ago one odd element of the current tech cycle: The "WORK HARDER, NOT SMARTER" dynamic at its core. Brute-force sprending on physical computing capacity is now seen as as the main near-term edge, with "smarter" promised prodictivity gains...eventually. (Via JP Morgan)