If I said that 3-4 rate cuts would happen this year and investors put money in the market in anticipation of those rate cuts, then later turned around and said that the cuts may not happen after all, wouldn't it be completely reasonable for the investors to take that money back out? I don't get your point here... nothing suggests that this is just a simple correction, it's a re-evaluation of the overall market and economy for the intermediate future. You can also see this in bond yields that have skyrocketed over the past couple weeks.
Also, earnings don't mean shit without good guidance. Look at the earnings that have been posted in the past couple weeks: JPM, LULU, NFLX, TSM, SMCI just to name a few. The problem today was that SMCI did not give guidance on their expected numbers like they did previously when things were good especially since it came in right after TSM. This led investors to draw the conclusion that the entire semiconductor industry might be hitting a slowdown, which caused today's tech selloff. Maybe people will have more hope for AMD or MSFT, but that won't prop up the entire S&P500 because AAPL has poor expectations and NVDA doesn't report till June.
I'm not saying there won't be a bounce next week. I'm just saying your logic is wrong. The market has dropped harder than this in a 7 day period before (it's only down \~4% since last Friday compared to \~8% down Jan 2022 or \~7% Aug 2022), it can happen again.
- The only stock you discussed was TSLA and based on your own words - puts are in play !
- Agreed, some good tech ERs this week (MSFT, AMZN, META, GOOG) but even with good ER, dont think they gonna move the market needle much. But then you have a boatload of companies that will fall even with good EPS but poor guidance, etc. case in point (NFLX, TSM)
- Almost 1 TRILLION of market cap was ~~evaporated~~ redirected to other investments. Case in point, no rate cuts till 2025 prolly means less growth.
- Production is expected to decelerate from last quarter’s 3.4% level, with the Atlanta Fed’s GDPNow tool projecting 2.9% GDP growth
- 10% Market correction based on previous ones puts SPY around \~475. We still have ways to go and on top of that elections, overvaluation, inflation, wars, corporate greed and consumer spendthrift makes this crash a little more unpredictable.
Fortunately for me, I dont take financial advice from pot smoking, professional Street Fighter/Magic The Gathering players that can't do any real world jobs outside of citing peer reviewed papers in FB arguments and buying fake money so Im not doing too terribly tbh
Thanks, if you dont mind, what's your feel for Monday ? With the software tech heavy ER week with some companies prolly doing good (MSFT, META, AMZN, GOOG) I feel QQQ might kinda be flat or even gain a fraction. Unless companies like INTC really tank.
SPY in its top 10 has MSFT, AAPL, NVDA, AMZN, GOOG. some of which might fare decently at ER so it mind end up how bad the others perform. It could be a slight dip something like today in the end.
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Completely agree that it was frothy and needed to purge some leverage. Like I said, I'm probably a couple hundred points early on this entry, but my point is that solid companies will rebound due to dollar debasement. Just curious though about your point re: vendor financing... it was my understanding that NVDA's main customers in the chip space were the other big tech companies (META, MSFT, AMZN, etc.)? Or are you talking about some kind of financing in connection with their SW stack?
Aapl looks real oversold, im tempted to open some contracts but earnings in less than 2 weeks and it could run up or down to it without reason, hard to know anymore
You make excellent points and I very much appreciate the reasoned response.
I think in 2023 Office revenue was barely above Azure - I wouldn't be surprised if office is #2 now.
But if I understand AMZN and MSFT comments on cloud growth, it is still growing, but the key issue is that it is doing so more slowly.
There was a large move to the cloud in the past decade and MSFT/AMZN benefited significantly. The growth will likely continue, but the stock is priced (again, on a historical basis which might be flawed) on the premise that the user/revenue growth will continue at the same pace.
Why do I find that hard to believe? Azure was released around 2010 when MSFTs market cap was approx. $200 Billion. Azure now has almost 1 billion users - including over 85% of fortune 500 companies. Essentially, everyone who can use AZURE is on the platform - And this very much explains why it has gained over $2.8 Trillion dollars in market value over the past decade.
Any further gains will have to be through capturing other companies market share - which comes with margin compression. There is only so much pie left to grow.
Not to ramble (too late?), but it reminds me of Apple. It's easy to keep growing at insane levels, when you have an amazing product, that zero people own (circa 2008) - But eventually, everyone who wants an iPhone, has an iPhone (\~1.5 billion users today).
Sure, there are replacement cycles, but that won't give you the same growth as literally adding 20-30 million actual new users every quarter (I guess there's always INDIA if they can get themselves out of poverty) And, that's why you see them trying to pivot to "services" to extract more $ from their existing base.
It's the nature of market saturation. Even today, NFLX told everyone they aren't going to report new users anymore. They know they are starting to hit that diminishing returns level. After their password crackdown, it is highly unlikely they will be able to continue the exponential user growth they have experienced in the past. And so, they will try to extract more $ from their existing users through price raises/ads. Going forward, they would rather be judged on revenue growth, because they know they aren't going to be able to shock analysts with 20 million news users every quarter anymore.
I guess we will find out in a few days whether MSFT was able to add a significant amount of new customers while not losing margin. They certainly might.
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Thanks for your submission!
To keep things interesting, we want to see big gains and big losses!
So we've set the following thresholds for Gain, Loss, and YOLO flaired posts:
* YOLO posts must be a minimum of $10,000 of options or $25,000 of shares and recently opened.
* Gain / Loss posts must show realized gains or losses of more than $2,500 for options or $5,000 for shares.
We want to see the actual trade. What you got in at, what you sold at. Then tell us why you did it. Give us the story of why you're a fucking genius (or idiot).
This is what a great post looks like:
[$17.2K Gain on AMZN](https://www.reddit.com/r/wallstreetbets/comments/wb5m4o/not_too_shabby_172k_gain_amzn/) - OP described his gain in the title, has a clear screenshot showing both the entry and exit, meaning his gains were locked in, and they explained their reasoning in the comments and what they learned. All around a great post!
Here are examples of what could get your post removed:
* [$300,000 SDC Loss. Still not selling](https://www.reddit.com/r/wallstreetbets/comments/wpm9am/over_300000_unrealized_loss_sdc_not_selling/) - Even though this is a tremendous loss and something worth posting about, **the position hasn't been closed yet**.
Here are examples of amazing posts which could have been even better:
* [$75,000 DDOG Loss.](https://www.reddit.com/r/wallstreetbets/comments/unsrey/loss_porn_ddog_call/) - This is a great post and one that won't get removed. However, the OP could have talked about *why* they entered the position in the first place, what their target price was, and what went wrong. OP didn't stick around in the comments to answer any questions.
* [$1.1MM Loss, No details](https://www.reddit.com/r/wallstreetbets/comments/lxm6wt/hold_me_1100000_loss/) - OP simply posted a screenshot of their overall portfolio balance. It's definitely a big loss, but it's not that interesting without OP talking about what trades they were in and why. OP didn't answer most questions in the comments which left many readers speculating on what happened.
---
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