Margin debt has reached an all-time high of $1.5 trillion, doubling over four years, but relative to market capitalization, it remains near normal levels seen in the 2010s. The real concern lies with leveraged ETFs, especially those focused on semiconductors, which have seen assets under management plunge from about $163 billion to $60 billion recently. This $100 billion drop reflects a healthy market correction rather than a broader market collapse, as non-leveraged investors continue to buy semiconductor ETFs. Semiconductors now contribute nearly half of the S&P 500's earnings growth and remain reasonably valued compared to software stocks. The analyst remains bullish, viewing the semiconductor selloff as a dip and expects the S&P 500 to reach 8,500 by year-end.
The Technology Select Sector SPDR Fund (XLK) offers low headline fees but carries significant hidden risks due to heavy concentration in just a few tech giants like NVIDIA, Apple, and Microsoft, which together make up 40% of the fund. Investors who a...
The Nasdaq 100 has underperformed other major US indices this week, dropping 2.7% due to a rotation away from high-valued AI and semiconductor stocks. Concerns over heavy capital spending, delayed AI profits, and volatility in chip stocks have shifte...
