The S&P 500 is only about 3% below its record high, yet 60% of its stocks are already in a bear market, per Goldman …

The S&P 500 is only about 3% below its record high, yet 60% of its stocks are already in a bear market, per Goldman Sachs

That means 3 in 5 members are down 20% or more from their 52 week highs, a setup Goldman trader Bobby Molavi calls a "stealth bear market"

The Magnificent 7 have lost about $4 trillion in market value since Oct 15, and the Philly semiconductor index fell 7% last Friday to break below its 200 day average for the first time in a year

Demand isn't the problem. $Alphabet(GOOGL.US) Cloud revenue doubled, $Microsoft(MSFT.US) Azure grew 48% and $Amazon(AMZN.US) AWS grew 39%, its fastest pace in 5 years

The worry is the bill. The 4 biggest hyperscalers generated just $26B of combined free cash flow, and $Amazon(AMZN.US) long term debt jumped from $66B to $173B in 9 months

Molavi also flags the spread between B and CCC rated bonds at 8 points, a level seen fewer than 5 times since 1996, and the S&P 500 was at least 11.5% below its high every time

The index headline looks calm, but under the hood most stocks are already in a downturn while AI capex, not AI demand, sets the tone

Source: StockMarket.News