- Instruments
Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.
S&P 500 entered a bull market, up over 20% since the October lows of last year, putting an end to the longest bear market finishing only 10.5% below its peak. The index trader above 4300 for the first time since August 2022, defying the Fed rate hiking cycle. Over the last 14 months, the US central bank hiked rates 10 times totaling 5%, making it the fastest pace of rate bumps in the past 35 years.
Overconcentration
However, over the last six months, only a handful of stocks, META, AMZN, AAPL, MSFT, GOOGL, TSLA, and NVDA, have driven S&P 500 returns year-to-date. If we combined those seven tech giants in one index, it would be up 53% since the start of the year; without those seven names, the S&P 493 would have been flat over that same period. This insane tech outperformance and overconcentration have contributed to the abysmal market breadth.
The hunger for returns has led investors to chase growth stories – such as the AI wave that has catapulted many of these names to new highs, stretching the multiple valuations beyond normal. Of course, it is not uncommon for growth to outperform in the late cycle. However, investors need to exercise caution. The fear of missing out (FOMO) times has distorted the fundamentals for those tech titans as PE ratios have skyrocketed. These challenging multiples north of 30 are usually found on much smaller stocks with opportunities for rapid growth – not mega-caps with revenues already in the 100s billion (except for Nvidia).
The overconcentration in just a few names, while the remaining companies are barely flat, has left investors scratching their heads and questioning the sustainability of the rally if the tech sector pulls back at some point. Tech funds saw their first outflows in 2 months in the week ending June 7. Hence investors could hedge their positions just in case or even short the tech 2.0 bubble.
S&P 500 bulls – inflation continues to roll over.
All eyes will be on the CPI on Tuesday, followed by the FOMC on Wednesday.
Inflation continues to decline – the CPI has fallen for the 10 th consecutive month, up from 9.1% in June 2022 to 4.9% in April 2023. The Fed pausing and ultimately cutting rates before year-end is what the bull hopes for.
Median Analyst’s expectation is for a 4.1% for May, indicating a continued slowdown; this will bode well for the bulls penguin parade as it will give the (data dependent) Fed a chance pause; after all, there is no more significant point than the inflation print. And from there on, possibly one more 25 basis point hike followed by rate cuts.
This is very close to what the interest rate traders are pricing it. Pause this meeting, followed by a quarter-percentage-point increase and rate cuts by year-end.
S&P 500 bears – inflation turns out to be sticker does not fall ( would cause the Fed to continue hiking possibly until something in the markets break),and the overconcentration injust a handful of (tech) stocks continues will cause the Tech bubble 2.0 to burst.
As everyone piled into tech, it, as a percentage of the S&P 500, has grown to levels not since the “dot.com bubble.”
Market participants are trying to determine what the rate decision will mean for equities, especially considering the recent stock run-up and the interest rate traders are “pricing in.”
If the Fed “skips” at the June meeting and the data confirms a pause for the rest of 2023, yields will likely move lower. Should this happen, this will spell positive news for stocks that could extend beyond Tech. We could finally get some broader market participation and breadth! As Goldman points out in its recent memo: “episodes of sharply narrowing breadth have been followed by a “catch-up” from a broader valuation re-rating.”
Investors can bet long on the S&P 500 using our3x US 500and5x Long US 500 .
Alternatively, they can go short the S&P 500 using our -3x US 500.
Investors can also long the tech sector using our3x US Tech 100and 5x Long US Tech 100 .
Alternatively, they can go short the tech sector using our -3x US Tech 100 .
Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.
Share this:
By subscribing here, you agree with our Privacy Policy and you will receive our newsletters. You can unsubscribe at any time by following the link at the bottom of each newsletter.
Never miss out on important announcements. Get premium content ahead of the crowd. Enjoy exclusive insights via the newsletter only.
Terms and Conditions
Notice
If you are not classified as an institutional investor, you will be categorised as a private/retail investor. At this time, we cannot send communications directly to private/retail investors. You are welcome to view the contents of this website.
If you are an ‘Institutional investor’, you affirm either that you are a Per Se Professional Client, or that you wish to be treated as an Eligible Counterparty Client, both as defined under the Markets in Financial Instruments Directive, or an equivalent in a jurisdiction outside the European Economic Area.
Risk Warnings
The value of an investment in ETPs may go down as well as up and past performance is not a reliable indicator of future performance. Trading in ETPs may not be suitable for all types of investor as they carry a high degree of risk. You may lose all of your initial investment. Only speculate with money you can afford to lose. Changes in exchange rates may also cause your investment to go up or down in value. Tax laws may be subject to change. Please ensure that you fully understand the risks involved. If in any doubt, please seek independent financial advice. Investors should refer to the section entitled “Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in the securities offered by the Issuer.
This website is provided for your general information only and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any investment.
Nothing on this website is advice on the merits of any product or investment, nothing constitutes investment, legal, tax or any other advice nor is it to be relied on in making an investment decision. Prospective investors should obtain independent investment advice and inform themselves as to applicable legal requirements, exchange control regulations and taxes in their jurisdiction.
This website complies with the regulatory requirements of the United Kingdom. There may be laws in your country of nationality or residence or in the country from which you access this website which restrict the extent to which the website may be made available to you.
United States Visitors
The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions.
Persons accessing this website in the European Economic Area
Access to this site is restricted to Non-U.S. Persons outside the United States within the meaning of Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”). Each person accessing this site, by so doing, acknowledges that: (1) it is not a U.S. person (within the meaning of Regulation S under the Securities Act) and is located outside the U.S. (within the meaning of Regulation S under the Securities Act); and (2) any securities described herein (A) have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction and (B) may not be offered, sold, pledged or otherwise transferred except to persons outside the U.S. in accordance with Regulation S under the Securities Act pursuant to the terms of such securities. None of the funds on this website are registered under the United States Investment Advisers Act of 1940, as amended (the “Advisers Act”).
Exclusion of Liability
Certain documents made available on the website have been prepared and issued by persons other than Leverage Shares Management Company. This includes any Prospectus document. Leverage Shares Management Company is not responsible in any way for the content of any such document. Except in those cases, the information on the website has been given in good faith and every effort has been made to ensure its accuracy. Nevertheless, Leverage Shares Management Company shall not be responsible for loss occasioned as a result of reliance placed on any part of the website and it makes no guarantee as to the accuracy of any information or content on the website. The description of any ETP Security referred to in this website is a general one. The terms and conditions applicable to investors will be set out in the Prospectus, available on the website and should be read prior to making any investment.
Leverage Investment
Leverage Shares exchange-traded products (ETPs) provide leveraged exposure and are only suitable for experienced investors with knowledge of the risks and potential benefits of leveraged investment strategies.
Cookies
Leverage Shares Management Company may collect data about your computer, including, where available, your IP address, operating system and browser type, for system administration and other similar purposes (click here for more information). These are statistical data about users’ browsing actions and patterns, and they do not identify any individual user of the website. This is achieved by the use of cookies. A cookie is a small file of letters and numbers that is put on your computer if you agree to accept it. By clicking ‘I agree’ below, you are consenting to the use of cookies as described here. These cookies allow you to be distinguished from other users of the website, which helps Leverage Shares Company provide you with a better experience when you browse the website and also allows the website to be improved from time to time. Please note that you can adjust your browser settings to delete or block cookies, but you may not be able to access parts of our website without them.
This website is maintained by Leverage Shares Management Company, which is a limited liability company and is incorporated in Ireland with registered offices at 2 Grand Canal Square, Grand Canal Harbour, Dublin 2.
By clicking you agree to the Terms and Conditions displayed.
Terms and Conditions
Notice
If you are not classified as an institutional investor, you will be categorised as a private/retail investor. At this time, we cannot send communications directly to private/retail investors. You are welcome to view the contents of this website.
If you are an ‘Institutional investor’, you affirm either that you are a Per Se Professional Client, or that you wish to be treated as an Eligible Counterparty Client, both as defined under the Markets in Financial Instruments Directive, or an equivalent in a jurisdiction outside the European Economic Area.
Risk Warnings
The value of an investment in ETPs may go down as well as up and past performance is not a reliable indicator of future performance. Trading in ETPs may not be suitable for all types of investor as they carry a high degree of risk. You may lose all of your initial investment. Only speculate with money you can afford to lose. Changes in exchange rates may also cause your investment to go up or down in value. Tax laws may be subject to change. Please ensure that you fully understand the risks involved. If in any doubt, please seek independent financial advice. Investors should refer to the section entitled “Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in the securities offered by the Issuer.
This website is provided for your general information only and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any investment.
Nothing on this website is advice on the merits of any product or investment, nothing constitutes investment, legal, tax or any other advice nor is it to be relied on in making an investment decision. Prospective investors should obtain independent investment advice and inform themselves as to applicable legal requirements, exchange control regulations and taxes in their jurisdiction.
This website complies with the regulatory requirements of the United Kingdom. There may be laws in your country of nationality or residence or in the country from which you access this website which restrict the extent to which the website may be made available to you.
United States Visitors
The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions.
Persons accessing this website in the European Economic Area
Access to this site is restricted to Non-U.S. Persons outside the United States within the meaning of Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”). Each person accessing this site, by so doing, acknowledges that: (1) it is not a U.S. person (within the meaning of Regulation S under the Securities Act) and is located outside the U.S. (within the meaning of Regulation S under the Securities Act); and (2) any securities described herein (A) have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction and (B) may not be offered, sold, pledged or otherwise transferred except to persons outside the U.S. in accordance with Regulation S under the Securities Act pursuant to the terms of such securities. None of the funds on this website are registered under the United States Investment Advisers Act of 1940, as amended (the “Advisers Act”).
Exclusion of Liability
Certain documents made available on the website have been prepared and issued by persons other than Leverage Shares Management Company. This includes any Prospectus document. Leverage Shares Management Company is not responsible in any way for the content of any such document. Except in those cases, the information on the website has been given in good faith and every effort has been made to ensure its accuracy. Nevertheless, Leverage Shares Management Company shall not be responsible for loss occasioned as a result of reliance placed on any part of the website and it makes no guarantee as to the accuracy of any information or content on the website. The description of any ETP Security referred to in this website is a general one. The terms and conditions applicable to investors will be set out in the Prospectus, available on the website and should be read prior to making any investment.
Leverage Investment
Leverage Shares exchange-traded products (ETPs) provide leveraged exposure and are only suitable for experienced investors with knowledge of the risks and potential benefits of leveraged investment strategies.
Cookies
Leverage Shares Management Company may collect data about your computer, including, where available, your IP address, operating system and browser type, for system administration and other similar purposes (click here for more information). These are statistical data about users’ browsing actions and patterns, and they do not identify any individual user of the website. This is achieved by the use of cookies. A cookie is a small file of letters and numbers that is put on your computer if you agree to accept it. By clicking ‘I agree’ below, you are consenting to the use of cookies as described here. These cookies allow you to be distinguished from other users of the website, which helps Leverage Shares Company provide you with a better experience when you browse the website and also allows the website to be improved from time to time. Please note that you can adjust your browser settings to delete or block cookies, but you may not be able to access parts of our website without them.
This website is maintained by Leverage Shares Management Company, which is a limited liability company and is incorporated in Ireland with registered offices at 2 Grand Canal Square, Grand Canal Harbour, Dublin 2.
By clicking you agree to the Terms and Conditions displayed.
