Unhedged Stock market party but why?
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Jun 3, 2025 Equities are skyrocketing, driven by the tech titans of the 'Magnificent 7.' The hosts dissect the strange optimism amidst economic challenges like tariffs and inventory concerns. Trade tensions could complicate the landscape, especially for tech stocks. They offer investment strategies while navigating cautious optimism. Humorously, they delve into Nigeria's extravagant 'money showers' at celebrations, making a lighthearted conclusion to a serious market discussion.
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Magnificent Seven Drive Market Gains
- Almost three quarters of S&P 500 gains since May 1 come from seven tech giants.
- This concentration highlights a return to the 'Magnificent Seven' dominating the market.
Tariffs Weaken Goods but Not Services
- Goods economy is weakened by steel and aluminium tariffs causing inventory build-ups.
- The larger services economy is still relatively healthy, supporting the US economy overall.
Section 899 Targets Foreign Investors
- Section 899 tax targets foreign investors selectively based on perceived unfair tax regimes.
- It's conceptually similar to tariffs on goods but risks alienating foreign holders of US assets.