The Nasdaq has hit a new high again. The current main trend in the U.S. stock market is divergence.

Last Friday, the Nasdaq hit a record high, and the S&P 500 also approached its previous peak. Although U.S. stocks are currently at high valuations, the pricing has not yet detached from earnings support. However, as seen from recent earnings reports, the main trend in U.S. stocks remains divergence. This divergence is not only reflected between sectors but also in profit structures.

The primary reason for inter-sector divergence is still the varying impacts of tariffs. For example, consumer stocks, tech stocks, and pharmaceutical stocks face dual impacts from policies and costs due to tariffs. The divergence in profit structures mainly occurs at the company level. First, most profits are still concentrated in the "Magnificent Seven," which goes without saying. On the other hand, most companies have increased capital expenditures in AI to catch the wave, but the returns vary. For instance, NVIDIA topped the tech sector with 120% revenue growth and a market cap of 4 trillion, while Amazon plummeted due to lack of breakthroughs in AI and poor outlook. Moreover, the gap between leaders and non-leaders has become more pronounced. When the market no longer blindly favors U.S. stocks, cases of stocks rising with the sector without fundamental support have become increasingly rare.

Regarding specific stocks, there were no new drivers over the weekend. We'll see tomorrow.

Another Hong Kong IPO, Yinuo Medicine and Tianyue Advanced, happen to represent two methods under the new regulations. Yinuo has a fixed 10% allocation, while Tianyue is based on margin multiples. Yinuo offers very little to retail investors, so I’ll use multiple accounts for cash subscriptions—no subscription fee anyway, so it’s like a lottery. I haven’t looked into Tianyue’s quality yet; will update tomorrow.

$INNOGEN-B(02591.HK) $SICC(02631.HK) $SICC(688234.SH) $NVIDIA(NVDA.US) $Amazon(AMZN.US)

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