TOPLEY’S TOP 10 – Feb 21, 2024

1. Corporate Cash at All-Time Highs

2. MAG-7 64X Larger than Bank Index

Jim Reid Deutsche Bank To illustrate, today’s CoTD looks at the market cap of the Mag-7 versus that of the US Regional bank equity index with 50 constituents, and the S&P Financials index with 72 members including the mega banks. The Mag-7 are collectively c.64 times bigger than the entire US Regional Bank index.

3. AAPL-Two Lower Highs and Close Below 200-Day

4. Is SMCI the New MEME?

Bloomberg Carmen ReinickeStill, short sellers are sticking to their bets that Super Micro’s climb will eventually end. In the last 30 days, the group has increased shares shorted by 12%, piling an additional $623 million into bets against the artificial intelligence darling, per S3.

On Friday, the cost of puts — which serve as downside protection — sank less than equivalent calls, which give exposure to added gains. That dynamic reversed trading patterns earlier in the week, when seemingly boundless euphoria for artificial intelligence pumped interest in call options and propelled the one-month call skew to its highest level in more than a year.

Short sellers may be emboldened by the San Jose, California-based company’s sharp moves higher. The stock rallied 246% in 2023 and is up 183% so far this year, a jump that has some resemblance to the social media-fueled gains of AMC Entertainment Holdings Inc. and GameStop Corp.

5. Largest YTD ETF Flows-IBIT #3

Jim Bianco

6. Transports -5% Correction

Transport stocks approaching blue one-year trendline.

7. Private Clients Flows…TIPS, Japan, and EM Debt

The Daily Shot Brief Rates: BofA’s private clients are getting back into TIPS.

Source: BofA Global Research

8. Housing Starts -14.8% Month Over Month

Business Insider Yuheng Zhan Housing starts collapsed 14.8% month-over-month in January to a five-month low, according to Census Bureau data released Friday.

The annualized rate of 1.331 million units came as as a surprise compared to consensus estimates, and the sudden plummet was even more stark relative to a big upward revision to December’s 1.562 million, up from an initial 1.46 million  Building permits also dropped 1.5% to 1.47 million, falling short of the forecast of 1.512 million. Private housing completions also disappointed, dropping 8.1% below the revised December estimate to 1.416 million. 

Building of single-family homes experienced a 4.7% decline following a 6.4% drop in December — marking the sharpest consecutive decline in that segment of the market since the summer of 2022.

Homebuilder ETF New Highs

9. Top 12 Fastest-Growing US States (by percentage growth rate)population

10. The 4-Word Phrase That’s a Sure Sign of Low Emotional Intelligence, According to Star Psychologist Adam Grant

Stop thinking and speaking about your feelings in this way, and you’ll instantly level up your emotional intelligence.

Life is full of difficult emotions. That’s unavoidable. What you do with those difficult emotions is what determines your level of emotional intelligence.

According to best-selling author and star psychologist Adam Grant, there’s one response that’s a sure sign your EQ is very low — and it can be captured in just one four-word phrase. 

When someone at work does something selfish, thoughtless, or manipulative, it’s entirely natural to feel a spike of anger (it can even be productive if channeled properly, research shows). What’s not healthy, Grant insisted on a recent episode of his podcast ReThinking featuring fellow psychologist Susan David, is to blame the other person for your rage. 

“I don’t judge emotions, but I do judge the way that people give up agency over their emotions,” Grant tells David. “A sign of emotional intelligence is abandoning the phrase ‘You made me feel.’ Because you’re giving other people power over your emotions. No one can make me feel anything, to take the line misattributed to Viktor Frankl.”

Which means if you regularly use that same phrase — “You made me feel” — you might be sitting on an opportunity to significantly improve your own EQ. 

It’s not that other people don’t influence our emotions. Of course they do. Nor is anyone arguing that other people’s behavior can’t be genuinely awful and worthy of our anger, sadness, or disappointment. Grant is also at pains to emphasize his comment should not be seen as letting genuine bad actors off the hook. 

“I’m not talking about abusive relationships here. If you’re being, you know, gaslit by a manipulative narcissist, that is not what we’re describing,” he underlines.  

But the two psychologists stress just how disempowering it is to believe there is no freedom of action — no conscious choice — between other people’s everyday problematic behavior and our mental and emotional response to it. “There is a space between stimulus and response. You control your behavior, but I choose my reactions,” Grant insists. 

A Wiser approach to your emotions 

The idea that we have the capacity to choose how we respond to provocations and disappointments is appealing. But it also raises an important question. If “You made me feel” is a red flag for low emotional intelligence because it implies other people control our feelings entirely, what is the alternative approach? How exactly do you create and employ that “space between stimulus and response” Grant talks about?  

Grant and David share some ideas in the podcast. David, for example, suggests a subtle but important switch in how you think about your emotions: “If we think about the language that we use, when we say, ‘I am,’ I am sad. I am angry. I am being undermined … You are showing complete linguistic fusion between yourself and your emotion.”

Here, there is no space between stimulus and response in which you can make a different choice. Instead of “I am sad,” David suggests, tell yourself “I’m noticing that I’m feeling sad.” Research shows emotions are stories we tell ourselves to explain physical and mental sensations. When you use language to remind yourself they are constructed in this way, you give yourself space to tell different, better stories. 

That’s a fascinating approach — and one I’ve written about before — but I recently read about a more practical method that translates academic theory into simple, everyday practice. It’s called the Wiser method and it’s endorsed by decades of research. Wiser stands for watch, interpret, select, engage, reflect. 

You can read about it in detail here, but it basically boils down to exactly what Grant recommends. Rather than feeling hijacked by your emotions, you observe and probe them before choosing how you want to label your feelings and respond in practice. In this model, others can give you unpleasant fodder for consideration, but they can’t make you feel anything that doesn’t serve you. 

Trying to tamp down or ignore emotions through sheer force of will seldom works, but taking a step back and considering your feelings before acting on them is an excellent way to significantly increase your emotional intelligence.

The 4-Word Phrase That’s a Sure Sign of Low Emotional Intelligence, According to Star Psychologist Adam Grant |

TOPLEY’S TOP 10 – Feb 20, 2024

1. Earnings Week…22% of Russell Reporting

Dave Lutz Jones Trading Cam notes As we await NVDA’s earnings report keep this in mind: BoA Global Fund Manager Survey shows a possible crowded long in technology positioning, but managers can stay overweight for years.

22% Russell’s weight reports, and 45% of XOP’s – but all eyes on NVDA Wednesday.

2. A $700 Billion Insurance Product Is Powering the US Credit Market Rally-Bloomberg

  • Annuity sales could total about $700 billion in next two years
  • Funds likely to be allocated to corporate and structured debt

By Olivia Raimonde and Alicia Clanton

An insurance product that consumers use to help fund their retirements is selling at record levels, powering demand for corporate debt and commercial mortgage bonds.

Last year, sales of annuities, which allow consumers to effectively buy income for the rest of their lives, reached an all-time record high of $385 billion, according to life insurance trade group Limra. That’s up 23% from the year before. The products grew more attractive as rising interest rates translate into higher potential annual payouts from the products.

Behind the scenes, the life insurers that usually sell annuities are buying bonds to generate income for the products, and in particular, corporate debt and asset-backed securities including mortgage bonds. Their demand might decline a bit this year after bond yields have fallen, but Limra says annuity sales are still expected to remain strong by historic standards.

3. Dividend Payers vs. Non-Payers Long-Term

Motley Fool,correlated%20to%20the%20stock%20market.

4. S&P Vs. REITS 1972-2021

5. Home Depot Chart …Earnings Today

HD did not make it back to previous highs

6. Walmart Did Make New Highs Prior to Today’s Earnings

7. Another Day…Another China Implosion Chart …Foreign Investments in China $350B to $50B

China’s direct investment liabilities in its balance of payments stood at $33 billion last year, according to data from the State Administration of Foreign Exchange released Sunday. That measure of new foreign investment into the country — which records monetary flows connected to foreign-owned entities in China — was 82% lower than the 2022 level and the lowest since 1993.

8. China Solar Panel Overcapacity 

Barrons The country’s overcapacity and overproduction pose risks not just to China but also to rivals in these sectors abroad. Take solar panels. Beijing mandated that state-owned enterprises get half of their energy capacity from renewables by 2025, contributing to strong solar panel growth. But prices for solar inputs and panels have tumbled. Eurasia Group estimates that 60% to 70% of solar firms could face bankruptcy or acquisitions in the next couple of years, potentially saddling Beijing with another debt-laden sector.
By Reshma Kapadia

9. Cutting the Cord on Cable Continues with New Sports Streaming Packages….CHTR Negative 5-Year Return

10. Successful People vs. Unsuccessful People


TOPLEY’S TOP 10 – Feb 19, 2024

1. Earnings Growth 493 vs. Mag 7

Found at Irrelevant Investor

2. Micro-Cap Stocks Still 30% Off Highs

©1999-2024 All Rights Reserved

3. Robinhood Breaking Out of a 2-Year Sideways Pattern?

HOOD chart

4. Softbank Chart Update

Softbank held 2020 lows still 40% below highs

5. Dividend Growers Making a Comeback

Equities: Dividend growers have been outperforming the average stock in the S&P 500

Source: The Daily Shot

6. SMCI Hit Wall Street Record 97 RSI (overbought) Before Sell-Off Friday

SMCI AI Small Cap

7. PitchBook Analyst Note: Estimating US VC First-Time Manager Dropouts

37% of first-time VCs will not be able to raise a second fund 

2021 was the heyday for new entrants in venture capital: First-time fundraising reached a peak of $14.7 billion, including to more inexperienced managers without bulletproof track records or networks. Now that LPs have retreated, those same fund managers are in trouble, according to our latest VC analyst note. 

More than 247 first-time managers who closed funds between 2019 to 2021 will not be able to raise a sophomore fund, according to PitchBook estimates. Those particularly at risk of being incapable of raising a second VC fund will likely be managers of funds with less than $10 million in commitments and those in emerging US markets.

8. China Vows to Centralize Tech Development Under Communist Party

  • Xi’s party will take more direct role in steering development
  • Tech leadership is a major priority for China’s government

By Yuan Gao

China’s ruling Communist Party vowed to enhance its role in steering its science and technology industries, centralizing decision-making power as the country navigates US trade curbs designed to limit its advancement.

The party will refine a mechanism whereby technological works are led by the Central Committee, according to state broadcaster CCTV citing a central government meeting led by President Xi Jinping. The news broadcast didn’t specify details of the plan, though the pronouncement marks an escalation of Beijing’s prioritization of a sector that China’s leaders consider of critical importance.

A year ago, Xi called for China to accelerate scientific research and replace foreign technologies with homegrown alternatives. His remarks were part of a broader push to stimulate both domestic efforts and international cooperation in the pursuit of technological independence from the US. Export controls from Washington have curtailed China’s access to the most advanced semiconductors, especially those made by Nvidia Corp. to accelerate artificial intelligence training.

Read More: Xi Calls for China to Speed Basic Research to Counter US Curbs

China is now elevating the party’s role in directing its fight against the US for leadership across an array of strategic technologies, including semiconductors and AI.

Xi had earlier tapped his top deputy, former Vice Premier Liu He, to oversee development of China’s own chip technologies. Under that regime, Huawei Technologies Co.’s moonshot chipmaking effort yielded results that surprised outside observers by producing a modern smartphone chip without recourse to US tech.

9. Car Insurance Rates +85% vs. CPI +31%

10. New DNA clock may change how we measure aging

by StudyFinds Staff

BOSTON — Can we finally stop the aging process? Researchers at Brigham and Women’s Hospital (BWH) are hoping so after developing a DNA clock that may unlock the secrets of aging. These new epigenetic clocks can more accurately predict biological aging and the effectiveness of anti-aging treatments. This study introduces a machine-learning model capable of distinguishing between genetic factors that either accelerate or decelerate the aging process, a distinction not made by previous models.

The research revolves around the concept of DNA methylation, a biological process that modifies the DNA structure and affects how genes function. This process is closely linked to aging, with certain DNA regions, known as CpG sites, being particularly influential. The novel epigenetic clocks, named CausAge, DamAge, and AdaptAge, are designed to parse out which methylation changes are merely associated with aging from those that directly cause it.

“Previous clocks considered the relationship between methylation patterns and features we know are correlated with aging, but they don’t tell us which factors cause one’s body to age faster or slower. We have created the first clock to distinguish between cause and effect,” says study corresponding author Dr. Vadim Gladyshev, a principal investigator in the Division of Genetics at BWH, in a media release. “Our clocks distinguish between changes that accelerate and counteract aging to predict biological age and assess the efficacy of aging interventions.”

To develop these clocks, researchers employed an epigenome-wide Mendelian Randomization (EWMR) on over 20,000 CpG sites across the genome, correlating them with eight aging-related traits, including lifespan, health span, and frailty index. This technique allowed them to establish causation rather than a mere correlation between DNA structure and observable aging traits.

TOPLEY’S TOP 10 – Feb 16, 2024

1. Tech 2024 vs. 2000 Internet Bubble

Zach Goldberg Jefferies Will rational optimism turns into irrational exuberance? Applying the peak of the TMT bubble maths to the Nasdaq-100, the S&P 500 would have to reach 6250 to price-in the same level of irrational exuberance, according to the excellent cross-asset team at Soc Gen.

  1. At the peak of the TMT bubble, the Tech sector traded at 2x its profit share in the S&P 500. Today it is at 1.25x of profits.
  2. SPX was at a 25x fwd P/E; today we are 20xfwd P/E.
  3. Applying the peak of the TMT bubble maths to the Nasdaq-100, the S&P 500 would have to reach 6250 to price-in the same level of irrational exuberance.

2. Lower AI Mentions on Earnings Calls

Torsten Slok, Ph.D.Chief Economist, Partner

3. Zuck vs. AAPL ….Apple Lags Again vs. QQQ Yesterday

Morningbrew Letter

The billionaire grand dork of the metaverse, Mark Zuckerberg, took a digital dump on Apple’s new wearable technology yesterday in a three-minute Instagram reel about Meta’s Quest 3 headset that may as well have been captioned “she is very gorgeous to me!”

“I don’t just think that Quest is the better value, I think Quest is the better product, period,” the Meta CEO said in the video, which was recorded on a Quest 3 by a guy sitting across from him. Zuck telling the internet he believes Quest 3 out-headsets Vision Pro is about as much of a shocker as Zuck having a home bunker for gaming.

What’s more surprising is…that he shouted it from the rooftops on his personal Instagram account. Zuck’s decision to plop down on a couch and Apple Hands™ his way through a Quest 3 demo likely reflects Meta and Apple’s heated race to create the one true mixed-reality headset.

Looking to build on Meta’s head start in the VR/AR space, here’s what Zuck emphasized in his get-ready-with-me video review of Quest 3 vs. Vision Pro:

  • Quest can also do the mixed-reality-floating-screens thing that Apple calls “spatial computing,” except Meta’s goggles start at $500, compared to $3,500 for Vision Pro.
  • Quest doesn’t have a wired battery pack and is still about a bar of soap lighter than the Vision Pro, which some have criticized for causing headaches and neck pain.

Zuck gave a shout-out to the Apple “fanboys” who “get upset whenever anyone dares to question if Apple’s going to be the leader in a new category,” but he admitted that the Vision Pro’s screen resolution is superior and that the eye-tracking function is “really nice.”

It’s still anybody’s game. Meta started selling AR/VR headsets after it acquired Oculus in 2014. While its work has been overshadowed by the hype surrounding the Vision Pro lately, reviews of the new Apple product do not indicate an iPhone moment yet, and people have even started returning the headsets.—ML

4. Airline ETF …50day thru 200day to Upside in Feb

5. Long-Term Treasury ETF …Another Failed Rally?

6. Ackman “Betting on Zero” Again

Betting on Zero 2016 Documentary Trailer…Ackman Bet $1B Short Against Herbalife.

2024 Herbalife Cut in Half

7. XLF Financials ETF Making Run at Previous Highs

8. What Retail Sales Miss?  RTH Retail ETF Up on Day Yesterday….New All-Time Highs in 2024

9. Most Valuable Brands 2024 …5 of Mag 7 on List

Charlie Munger added brand value to Berkshire value thought process years ago

10. Most Americans say elected officials should avoid heated or aggressive speech-Pew Research


TOPLEY’S TOP 10 – Feb 15, 2024

1. S&P 500 Trading at Largest Valuation vs. S&P Equal Weight in 10 Years

Jack Ablin Cresset The S&P 500 is trading at a sizable valuation premium to the average S&P stock: it’s currently situated at more than four multiple turns above that of the equal-weighted market. That’s the largest valuation premium in more than 10 years thanks to the dominance of the largest names.

Market Broadening Will Likely Resume in 2H/24  | Cresset Capital

2. No Shorts Left in Bonds

Dave Lutz at Jones Trading No Shorts out there in Treasuries, as it is a way crowded long in anticipation of Fed Easing – The “Pain Trade” was a rip higher in yields.

3. Look for U.S. Dollar Break-Out

Negative for international stocks if dollar breaks-out

4. South Korea Nowhere for 5 Years

Barrons Korea’s Kospi Composite Index, the country’s main benchmark, has dropped an annualized 4.5%, including reinvested dividends, over the past three years, lagging not only the S&P 500’s 10% return but the MSCI World Index’s 7.6%.   That’s reflected in the Kospi index’s price/book ratio of just 0.2 times, which means the companies are worth less than their total net assets. The MSCI World index trades at just over three times book.

By Jacob Sonenshine

5. The Bookie Always Wins

Barrons By Randall W. Forsyth Indeed, the expansion of legal gambling has been a boon to stock market investors, notably those who have ridden shares of DraftKings. The Almost Daily Grant’s note this past week, from the invaluable advisory headed by Barron’s alum Jim Grant, pointed out that DraftKings’ shares were up some 283% from late 2022. That raised the company’s valuation to near $20 billion despite it having posted negative adjusted Ebitda (earnings before interest, taxes, depreciation, and amortization, a measure of cash flow) in each quarter going back to the start of 2019. DraftKings management sold $145.2 million of stock in the past three months, more than all but five of the 152 U.S.-listed consumer cyclical firms tracked by Bloomberg—proving again that the winners in gambling aren’t the punters but the bookies.

6. Uranium had Big Run…Cameco Gets Quick -18% Correction After Earnings

7. New York Community Bank (NYCB) Flirted with 2008 Levels During Recent Sell Off

8. Apple Intra-Day Big Underperformer Yesterday  -0.47% vs. QQQ +1.30%

AAPL stock 4th  pullback to 200day in 2024

9. America’s poorer counties are new investment boomtowns: study

Axios-Courtenay Brown

10. Global Antidepressant Users Per 1000 People

Tony Isola Blog