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Markets are settling into holiday mode, with stock futures slightly down on the last full trading day before Christmas. Here’s where things stand today: * Nasdaq-100: +0.37% * S&P 500: +0.04% (flat) * Dow Jones: -0.22% On Friday, the S&P 500 rose 1.1%, recovering
Quantum computing stocks are taking off in 2024. Is this the start of something big? Let’s take a closer look Google’s Chip Changes the Game Google’s new Willow chip, a 105-qubit processor, hit a big milestone: * Fixed Errors: It solved a 30-year problem by cutting down error
Government surveys that track the economy are failing. Budgets are shrinking, people are skipping surveys, and economic data we rely on is becoming less trustworthy. This is a big deal—because when the numbers are wrong, decisions that affect markets, businesses, and everyday life go wrong, too. Here’s what’
The S&P 500 Value Index just dropped 3.7%, marking its longest losing streak on record. Meanwhile, Bitcoin smashed past the $100,000 mark, and the Nasdaq climbed to 20,000. To me, it seems that value stocks have been left in the dust, and investors chasing bigger
Almost $10 billion has poured into Bitcoin ETFs since the US election, pushing Bitcoin past the $100,000 mark for the first time. The momentum is crazy, with Bitcoin posting its best winning streak since 2021. With investors pouring in, knowing the risks are more important than ever. Bitcoin’s
Investors in 2024 aren’t holding back. Margin debt is at record highs, call options are dominating, and the S&P 500 is having its best year in over a decade. I'll break down these trends and explain what’s causing the momentum.
A Debt-Driven Market Rally
Investors are borrowing more than ever to fuel their market positions. Margin debt hit $815 billion last month—a 28.3% jump in borrowing since Oct last year. Just short of the all time high in 2021.
What is margin debt? It’s money investors borrow from brokers to buy stocks or other assets. Think of it like using a credit card for investing.
Why does this matter? Borrowed money can boost gains when markets go up, but it also magnifies losses.
Sentiment Is Off the Charts
The CBOE Put/Call ratio is another sign of just how confident investors are right now. This number shows how many investors are betting on stocks to rise (calls) versus fall (puts). Right now, it’s sitting at 0.68—so there's more calls than puts in equities.
Investors are still betting on the market to keep climbing. Historically, periods of extreme bullish sentiment can lead to market corrections, but this is not definitive. It's more of a gauge than a predictor of market movements.
S&P 500’s Stellar Year
The S&P 500 is up 23.9% year-to-date, making it the best year since 2013. Tech stocks—especially those tied to AI—have been driving the bulk of the gains. Nvidia alone accounted for over a third of the S&P 500's returns.
It’s easy to see why optimism is high. But markets that climb this quickly can end up being vulnerable if the momentum fades.
What Does It All Mean? High leverage, extreme optimism, and a hot market make an interesting mix. Investors are clearly confident. The real question is whether that confidence is justified.
Key Takeaways:
- Investors borrowed $815 billion in margin debt this year.
- The Put/Call ratio hit 0.65, a sign of increased optimism.
- The S&P 500 is up 23.9%, its best year (so far) since 2013.
Curious how the election shook up the markets? Check out this post for a closer look at the key moves and what’s driving them.