Bait & Switch ?

Advertise A-I, deliver bombs? The recent A-I craze may have all but blinded retail traders into thinking this is a 'one stock' market made up of NVDA and no other. Clearly, we know that's not entirely true because AMZN is also near its all-time high. Yet a lot of articles read like that, and a lot of web-videos play like that. But are we missing anything? Of course. Also, beneath the surface, don't forget the fact that - sadly - the 'usual' way countries avoid or get out of recessions is to use the 'war play'. The chart below is of General Dynamics, one of the U.S. leading defense contractors, on a weekly basis.

While not as dopey gapping as NVDA is, the chart is also at its all-time-high as the country continues to sell arms in Ukraine, for sure, and likely in Israel as well (and many other places). Bombs don't have to be the only product. There can be "systems", drones, parts, consultants, etc., etc. And clearly, the U.S. and other countries are using arms to directly to defend ships in the Red Sea.

So, as the market is selling you NVDA, and AMZN and this is occurring even with divergences with HYG and the Dow Transports not having made a new higher high, just remember this key form of market 'stimulus' is insidiously occurring as well. I rarely look at the defense sector because I just assume with half-trillion dollar defense budgets this form of market pump is almost always occurring. Do you wonder why the solutions to these seeming intractable battles take so long? What incentive is there to solve the issues? Aren't there also some perverse incentives here 'not' to quickly solve such issues?

My apologies for being cynical. It really isn't me. It's the fact that war is often seen as a 'good thing' by markets rather than being seen as a bad thing for populations.

Have an excellent start to the week, and don't forget about those who are in dire circumstances because of this nonsense.

TraderJoe