Sam Badawi
MARKETS CONTINUE TO MELT UP, HOUSING DETERIORATING?
6/4/2025, 6:50:34 AM
Economic Summary
- Market breadth is currently healthy with many large-cap tech names near all-time highs, driven by momentum and sector leadership (e.g., NVDA, MSFT, META). This makes the market sensitive to sentiment shifts.
- Consumer credit stress is rising: 90+ day credit card delinquencies and auto delinquency metrics are climbing while student loan forbearance winds down, implying a potential near-term consumer spending contraction.
- Housing is normalizing with accelerating seller inventory and price cuts; falling shelter inflation could feed into CPI and reduce service-driven inflation, pressuring related sectors.
- Fixed income dynamics: the Fed controls short-term rates while the long end is influenced by fiscal policy and perceived debt risk; long-duration treasuries (TLT) are vulnerable unless fiscal discipline or slowdown brings yields down.
- Some high-growth stocks (e.g., PLTR) trade at elevated EV/NTM multiples, raising valuation risk if the market rotates away from growth or enters a prolonged downturn.
Bullish
- Alphabet (GOOGL) has buybacks and long-term growth vectors like Waymo.
- Microsoft (MSFT) and Meta (META) benefit from LLM/AI tailwinds and momentum.
- NVIDIA (NVDA) and semiconductors show strong momentum likely to push highs.
- Amazon (AMZN) retains AWS and ad cashflows that underpin long-term value.
Bearish
- High valuations on momentum names (e.g., PLTR) could collapse in a sustained bear market.
- Rising consumer delinquencies (credit cards, student loans, auto) threaten consumption and GDP.
- Housing normalization and growing inventory could drive shelter CPI lower and pinch consumer liquidity.
- Long-end treasuries face fiscal risk from rising debt and political spending, deterring long-term buyers.
- Regulatory and judicial risk for Google (GOOGL) could suppress multiple expansion and share price.
Bullish tickers
GOOGLMSFTMETANVDAAMZN
Bearish tickers
PLTRAMZNGOOGLTLT
GOOGL
Bullish
Long-term growth vectors (Waymo), strong cash flows and buybacks create a slingshot potential.
Bearish
Regulatory, DOJ/antitrust actions and judicial risks could pressure multiples and growth recognition.
AMZN
Bullish
AWS and advertising generate strong operating cashflow supporting long-term value.
Bearish
Tariff overhangs and macro uncertainty weigh on shares despite core cash-generating segments.
MSFT
Bullish
Significant recovery since April lows and strong AI/LLM tailwinds support upside.
Bearish
High expectations around AI/hardware could disappoint if execution lags.
META
Bullish
Cheaper MAG-7 valuation and AI/LLM runway make it a compelling growth story.
Bearish
Hardware bets and execution risks could delay meaningful returns.
NVDA
Bullish
Semiconductor momentum and AI demand likely to drive further upside.
Bearish
Momentum-driven price action risks sharp pullbacks if sentiment shifts.
PLTR
3 price targets
10012080
Bullish
Government contracts and future growth narrative could justify higher long-term valuations.
Bearish
Extremely high EV/NTM valuation (near 75 EV/NTM) makes it vulnerable to downside in a market pullback.
CRWD
Bullish
Strong demand for cybersecurity keeps adoption and revenue growth intact.
Bearish
Rising valuation concerns if growth slows after recent strength.
SNOW
Bullish
Fundamentals improving with expanding margins and positive earnings surprise potential.
Bearish
Volatility and sentiment could pressure momentum-driven gains.
TLT
Bullish
Could rally if growth slows and Fed cuts short rates, bringing the yield curve down.
Bearish
Long bonds risk if fiscal outlook deteriorates and long-term yields rise.
MELI
Bullish
Dominant e-commerce and fintech presence in underpenetrated markets supports long-term buy-and-hold thesis.
Bearish
High absolute price levels expose investors to volatility and geopolitical/FX risk in LatAm.
TSLA
Bullish
Multiple long-term monetization paths could justify premium valuations under bullish scenarios.
Bearish
Highly uncertain long-term modeling (FSD, robo-taxi) makes valuation speculative.
CCL
Bullish
Post-pandemic travel recovery supports demand for cruises in a bull market.
Bearish
Consumer discretionary exposure vulnerable in recession scenarios.
VG
Bullish
Approved projects (e.g., CP2) and future cashflow potential underpin a long-term bullish case.
Bearish
Execution and project delays could derail expected cash flows and valuation.
HOOD
Bullish
Retail adoption and product expansion can support upside over time.
Bearish
Platform volatility and retail-driven swings can create sharp drawdowns.
COREWEAVE
Bullish
Strong demand for GPU/cloud capacity could sustain growth if fundamentals align.
Bearish
Momentum-driven run to high nominal price risks sharp reversals absent fundamentals.
NEWBANK
Bullish
If restructuring succeeds, underpenetrated markets offer growth opportunities.
Bearish
Restructuring and sensitivity to regional financial markets increase near-term risk.
People mentioned
Sam SolidChrisPeter LynchStan DruckenmillerPaul Tudor JonesWarren BuffettElon MuskAlex KarpCat WilliamsSeymour DuckChris PatelZoe