Elbilassy: Bull Run Continues for Tech Stocks

Feels like there's been a bit more volatility than usual in stock markets this week. We had that full round trip for NVIDIA Micron after hours quite a severe pull back after they released their their forecast for sales. Does this tell you that perhaps the market is running out of steam? Yes, we think that at the summertime we're going to start seeing a breather because of the high valuations and also because of growth slowing down. We're we're waiting for GDP numbers later today that will give us more clues. But we do expect that there's equities in general are going to take a breather in the summer time. And also we are expecting tech stocks. It could be sustainable for them to continue going up. However, definitely I think we're bound to hit a pause. Let me just ask you whether you think if there is an equity pause that would be construed to be a buying opportunity for people in the market? Because again, NVIDIA, a couple of days ago, the story was very different. We were talking about maybe this being an ongoing correction and yet people were very quick to come in and buy the dip. I think there's definitely going to be an opportunity to buy the dip, but I think we're going to see a sizable correction in July, 2nd week of July, I presume just because historically the first week of July usually sees higher volatility and more gains for stocks. And then after that, you know, everyone's going away for the summer. So then we're bound to see a pause. This is a question that I've asked other people, but to what extent is the fate of of the S&P and NASDAQ determined by one single stock, NVIDIA? What happens with it from here onwards? I think that, well, the Magnificent 7, they're responsible for 60% of the S&P revenue so far this year. Hmm, Yes, we have most of them being overvalued, but I still think that they do have the capacity to go higher because of the the high demand for for example Nvidias H100 processor. So I still think that there is a capacity for them to really be like the barometer for the SNP. However, there's also other kind of alternative stocks that are also being pulling higher the SNP. And, but I think definitely we're going to see a breather in July. So tonight we've got a big election debate, presidential debate between Biden and Trump and that's going to be obviously very influential as we head into November. From a market participants perspective, how are you thinking about the possibility of a return of President Trump and what that would mean for tariffs and, and some of the, you know, domestic economy, How that's going to impact the consumer? Should tariffs start being introduced at a blanket level in light of trade war with China? I think this is going to be more affected. I think it's going to be more heightened, let's say, the tensions between China and the USI think already they've placed a lot of tariffs over the past few months that things are getting a little bit more tensed. I think a Trump administration is really good for the cryptocurrencies and for the stock market in general. Just from what we've seen, any word from Trump really moves markets. It really gives us that volatility that we want, especially as brokerage companies. So I think a Trump administration's really going to be something incredibly, let's say enthusiastic in the markets and it will bring more optimism definitely than a Biden administration. Interesting. OK, interesting perspective from a market participants. The other phenomenon that we've been watching very closely is, is dollar yen. And I wonder to what extent you're looking at that and thinking if yen weakness continues. And that also is going to have ramifications on on domestic markets in U.S. markets, I think that we're waiting for a Bank of Japan intervention. We've already seen numerous ones from April till today. I think the dollar yen still has the capacity to go over 160 despite the many interventions that we saw. But we saw above 160, you saw 162. There's actually many banks that are saying that it could hit 170. So I think it's going to continue depreciating. So far I think we still have the capacity to see 165 after that then and that's also giving a momentum for gold prices. The end appreciating is also supporting the bullion, but things have changed since the last time I've been. Yeah, let's just wrap up the discussion with gold then. I see that, you know, you've written about gold in your research report and gold is interesting because China have been buying more and more of the of the bullion in some form of way to rotate against the USD. Do you expect that to continue? So they've halted that last month, but I think that at any given time this may continue and this could push gold prices up. But I think that on a technical perspective we're seeing a head and shoulders pattern. So we're looking at levels below the 2300 and I think that if we continue in that way then we can see 2270 or 2302 thousand 250 levels as basically a big support for gold prices.