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Wall Street's Mag 7 trade, Broadcom and Nvidia: Takeaways

Markets are extending gains, as the S&P 500 (^GSPC) and Nasdaq (^IXIC) touch new record highs at Tuesday's market close. This comes as Nvidia (NVDA) exceeds Microsoft (MSFT) as the most valuable publicly traded company.

Yahoo Finance's Jared Blikre breaks down the top market takeaways of the day including Wall Street's ongoing investments into Magnificent 7 tech stocks, concerns within the commercial real estate sector, and the increased competition among chipmakers Nvidia and Broadcom (AVGO).

For more expert insight and the latest market action, click here to watch this full episode of Asking for a Trend.

This post was written by Angel Smith

Video transcript

The S and P 500 NASDAQ notched new record highs extending the rally while NVIDIA surpasses Microsoft to become the most valuable public company.

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Yahoo Finance's Jared Blicker joins us here with more on the trading day takeaways.

Jared.

You know, today is uh the global Fund manager survey as published by the Bank of America and this is something I look forward to every month.

Get a lot of great charts side of it.

You get a feel for what asset manager they have two thirds of a trillion dollars under management.

So these are some big names in here and as a group, they can kind of, you get a sense of where things are going and when the herd gets to one extreme, well, you can do the opposite.

That's what Bank of America recognizes here.

So my takeaway number one is Wall Street is quadrupling down on the mag seven trade and I'm not saying doubling or tripling down, they're quadrupling down.

Um You can see 69% are saying long magnificent.

7 69% is a big number.

In fact, when you get into the seventies, this is sounding like the 20 twenties when long tech was also the most crowded trade.

So I point out that consideration because what happened after that, we had another boom year in 21.

Then we had that huge, huge bear market in 2022 where we saw gains just evaporated.

So all of this crowding sets up the potential, not necessarily but the potential for some downside there in those days.

And so we were talking here, it kind of feature that hot theme we're talking about now, which is like, yes, we have a rally but it's been narrow, really led by big tech and kind of, you know, outperforming everybody else.

Yeah.

And to be fair, uh most rallies historically are crowded trades, but this one is just a little bit more crowded than usual.

And so we're paying attention to that.

Now, my second point here is com commercial real estate concerns.

They are rising and this is something, this is a long phenomenon.

You were just telling me about a conversation you were having with a guest.

Uh This is uh this is gonna take a long time to play out because that's the way these leases are structured.

They're usually over 10 years.

But here's a chart that shows when we're, when we're thinking about systemic uh systemic uh credit events.

And that's something that affects the entire investment sphere, sphere in the world, commercial real estate.

34%.

That's a pretty big number.

And remember shadow banking from the global financial crisis.

Well, that's still at 22%.

You know, you have all these uh subprime auto loans that are being foisted on, you know, to through the A BS system, uh US government debt, that's another one.

The rates have been variable and also volatile and that can spill over into other things.

China real estate.

That's kind of a echo of us, commercial real estate but not, it's actually a completely different problem.

And the yen just surfacing here.

So that big problem they have over in the bank of Japan where they are looking to increase rates.

Well, it was interesting though because we were, we were talking about um David Steinbach from Heinz on the show and he was, he was, we had to discuss about CRE now, I would say he said in generally more, you know, positive.

I, I guess his only point was, you know, when he does his work, his firm does the work.

You don't, it's kind of dangerous to do like a paint, a broad brush.

In other words, he says there's such differences downtown and downtown building to building.

Exactly right.

We gotta move on here.

I think uh Broadcom, this is my third takeaway.

We talk about chip stocks, NVIDIA, the biggest stock in the solar system, but Broadcom is actually outperforming NVIDIA over this seven day rally and it's been a massive seven day rally.

But let me just sort by performing.

Here we go.

A VGO.

That's broad cam of 28% then arm right there, neck and neck.

Uh S MC I, we got Skyworks, we got Mikron gotta go down the list.

NVIDIA is on the second row, but I will say this, I'm gonna close with this.

I'm gonna show our NASDAQ 100 heat map where NVIDIA is in that number one spot to close the day.

Stacy Rascon from Bernstein calls broadcom, one of the best A I stories in the industry.

That's interesting.

Tail bowed up, bold conversation about that.

But I know we don't have time.