Senior strategist: 40-year market cycle peak! NVIDIA is sending a sell signal
Senior financial strategist Brian pointed out in the report that NVIDIA's high valuation has made many employees wealthy, with 40% of employees having a net worth between $1 million and $20 million, and 37% exceeding $20 million. He warned that the continuous rise in NVIDIA's stock price is less likely and believes that the market may be approaching its peak, indicating a possible shift to a new economic cycle. He mentioned that interest rates of 4%-6% may become the new norm and warned of the possibility of facing rising inflation and interest rates in the future
Founder of Wind Shift Capital, senior financial strategist Bill Blain pointed out in a report on Tuesday that NVIDIA's sky-high valuation has made many employees very wealthy. He mentioned a recent survey that found among NVIDIA employees, 40% have a net worth between $1 million and $20 million, while 37% have a net worth exceeding $20 million.
Blain stated that as a result, less than a third of NVIDIA employees "face real financial pressure every day."
Blain wrote: "Do you really think those poor NVIDIA employees will fight hard for those who are already wealthy and highly motivated to protect their wealth and status? Do they believe NVIDIA's stock price will rise another 700%? Will they be willing to remain extremely poor compared to their colleagues and bosses? More likely, the vast wealth in the office means that relatively poor but still highly motivated employees will find better opportunities to gain wealth elsewhere."
Blain suggested that NVIDIA's massive valuation may also signal a peak in the broader U.S. stock market. He said that while investors expect the Fed to significantly cut interest rates next year, the Fed's accommodative policy may be "limited," and he believes that interest rates of 4%-6% will become the new normal for the market.
Blain said: "Some people think that the low interest rates promised by the Fed later this month will bring endless joy to the market. I think this may still be a moment of selling out the facts. Many, including myself, believe that a new long-term economic cycle may reverse the trend of declining inflation pressure over the past 40 years."
Blain stated that the current long-term cycle in the market began in the 1980s, when inflation steadily declined after a difficult period in the first 10 years. He suggested that the market could potentially enter a new cycle as early as 2025, citing geopolitical tensions, increasing commodity prices, and the growing burden of U.S. debt as sources of inflationary pressure.
He added: "I have just found the best reason to sell NVIDIA stock, confirming that we are at the market's peak. What will happen next? Perhaps 20 years of rising inflation, rising interest rates, and a global commodity supercycle triggered by countries vying for future strategic resources?"
Other strategists warned that despite prices falling from their peak in 2022, inflationary pressures are expected to persist. BlackRock strategists had previously predicted a resurgence in inflation and noted that oil prices could soar significantly