2.24.24: Magnificent 7 Short Interest at Record Lows

For Public Readers: Weekly Key U.S. and China brief market notes by Larry Cheung's Analyst Staff Team for our Public Email List

Feb 24, 2024

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In our emails, we will provide the following coverage points:

Brief Overview of U.S. & China Markets
Macro Chart in Focus
U.S. & China Upcoming Economic Calendar
Chart That Caught Our Eye

U.S and China Markets Brief Snapshot 🇺🇸 🇨🇳

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S&P 500 Index: 5088.80

KWEB (Chinese Internet) ETF: $25.94

Analyst Team Note:

Macro Chart In Focus

Analyst Team Note:
Incredible excerpt from Bloomberg - “Short interest is nearly nonexistent among tech behemoths. Analyst price targets are surging. Positioning from hedge funds to retail traders is getting more aggressive.
‘Right now, there’s no bear case,’ said Alec Young, chief investment strategist at data platform Mapsignals. “You don’t get a move like this in a company this big if the bears have a leg to stand on.”
For active managers, the pressure is getting more intense by the day to ride the upward momentum across tech-powered indexes like the S&P 500 and Nasdaq 100, both of which just rose for the 15th time in 17 weeks. In turn, the Nasdaq 100’s price-earnings ratio climbed above 30 times and its multiple to sales reached 5, figures with few precedents outside the late 1990s dot-com craze and its aftermath.”

Upcoming Economic Calendar

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U.S Economic Calendar (Upcoming Data Points)

China Economic Calendar (Upcoming Data Points)

Analyst Team Note:
Only 4% of Merrill’s wealth advisers expect a recession in 2024 (vs 85% last year). 51% expect a soft landing (below-trend GDP + disinflation) and 31% expect an above-trend GDP + disinflation.
Only 14% expect inflation to accelerate this year.
69% of advisors said they see more green shoots in the economy, up from 51% last year and the highest level since the 2021 survey, which was conducted a few months after the COVID vaccine news.

Chart That Caught Our Eye

Analyst Team Note:
The demand for corporate bonds has significantly increased, enabling companies to finance large mergers and acquisitions, a trend that had slowed down last year.
In recent weeks, around $50 billion in bonds were sold for such purposes, with major contributions from companies like AbbVie, Bristol Myers Squibb, and Cisco.
This surge has been driven by investors seeking higher yields before potential interest rate decreases, and is supported by a strong market backdrop with historically low spreads and high investor demand.