Where is the value in US technology?

The bull market in technology leaders is intact, but there is also opportunity elsewhere.

This week our intrepid blue crustacean goes to the USA.

“The problem with pictures on the internet is that they are often fake.” - Abe Lincoln Photo by Caleb Weiner on Unsplash

Campfire hot dog skewers, potato salad, a keg of Samuel Adams, and American pie!

A yabby could get fat on the 4th of July!

Over on the US stock-market, investors are getting fattened on the Magnificent Seven.

Let’s take a look, because this is one monster of a bull market.

Across the US market, we calculated the unrealized profit and loss for all stocks that traded and average of $1M USD/day. This liquidity screen improves the reliability of our estimates and narrows the focus to the more significant companies.

The unrealized profit and loss signal is pretty balanced across the whole market.

That amounts to 2250 stocks in total.

The signal is fairly balanced across the broad market. However, once we segment this by the size rank of companies, a very different picture emerges.

The bull market is really focused in the top 100 US stocks with emphasis on technology, finance and the consumer.

The picture for the smaller end of the market is much less favorable.

Note that the market outside the top 500 US stocks is much less bullish.

This is a large-capitalization stock bull market, that has a distinct sector bias.

Since the Magnificent Seven have dominated the news, it is worth looking at these.

The Magnificent Seven are all in significant unrealized profit

It is worth noting just how strongly positive the unrealized profit has been.

Given this situation, it is no surprise how strongly positive the sentiment remains to this group of stocks. As the attached chart pack shows, there has been little serious profit taking activity of late. We expect the momentum to continue.

Here is the chart pack for the Magnificent Seven stocks.

Usa Mag7 Chart Pack

1.97MB ∙ CBZ file

Read now

Read now

This is a zip file with the extension “.cbz”, for compatibility with substack.

You will need to change the extension back to “.zip” after download.

Then uncompress the archive to find this Excel spreadsheet.

Usasavvyyabbyscreen Mag7 20240507

524KB ∙ XLSX file

Download

Download

This has URL hotlinks in it to the charts you downloaded before.

Where is the best elsewhere?

Of course, it makes perfect sense to hold a selection of the technology leaders.

However, the US market is chock full of interesting companies.

Let’s take a look at a few, both growth stalwarts, and potential turn arounds.