Nvidia Has Driven All The Gains

Doug McIntyre and Lee Jackson discuss the recent 700-point jump in the Dow, the largest in a year, and debate whether this trend will continue or if the market is reaching unsustainable levels. They emphasize that a significant portion of the S&P 500’s 24% increase has been driven by a few key stocks, including NVIDIA (NASDAQ: NVDA). They explore the idea of a broader market advance, with Jackson suggesting that a rotation away from tech stocks to small caps and domestic companies could be well-timed. McIntyre expresses a preference for a more diversified market advance, involving a larger number of stocks contributing to the overall growth.

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Transcript:

So the Dow was up 700 points today, biggest jump in one year.

Are there more 700 point jumps ahead or are we now just getting to nosebleed levels?

You know, we’ve had this discussion over the last 90 days, and we’ve been at nosebleed levels for some time.

And, you know, on any, again, as we both have said and told our viewers, you know, 7 to 10 stocks have made up the lion’s share of the 24% move in the S&P.

Okay, and we know who those stocks are.

But the question really is, will it broaden out?

And it is to some degree broadening because the Dow stocks have lagged and the Dow itself as a whole has lagged.

I mean, the big winner today was United Healthcare, you know, and it’s a $500 stock.

So I’m not sure a lot of people have that in their portfolio.

But I think that the rotation away from the techs is probably pretty well-timed.

And I think people looking at small caps and domestic companies could be onto something here.

So I have a bias.

You tell me if you agree with it.

I would prefer to see the market advance broadly so that it’s being driven not by a small handful of stocks, but you can look and it goes deeper than that.

It’s 50, 100 stocks that make up a large part of the S&P 500.

Do you agree with that?

You’re sort of, we’re better off if it’s a broad advance than it’s just at this point, some days it’s like four stocks.

Yeah, well, I mean, again, the equal weighted S&P 500 is it’s up this year, but it’s not up 23%.

And there has to be a point that if it doesn’t expand and the breadth doesn’t get better, that when it does topple, it’ll be a rush to get out.

And you know what happens when that happens, then it feeds on itself and you get sellers and people go, well, maybe I should sell because everybody’s selling.

And if they’re the last person in on NVIDIA or any of those names, they’ll be, they’ll be the first people out.

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