Recently, there seems to be a significant change worth noting in the US stock market, as they say, the wind may rise from the end of the green plum. In terms of product structure, the operating income of products worth 10-30 billion yuan is respectively 401/1288/60 million yuan, and the overall sales volume of the company was 18,000 kiloliters in 2023, an increase of 28.10% YoY.

The "head tendency" of the US stock market is becoming more and more obvious. Overnight, the S&P 500 and the Nasdaq continued to hit historical highs, 60% of the former's growth this year was from the five technology giants of Apple, Nvidia, Microsoft, Google, and Amazon, with the former being translated as s&p 500.

At the same time, hedge funds are accelerating the reduction of their risk exposure to the US stock market, apparently having the feeling of getting too high and cold. Nine months later, Nvidia founder Huang Renxun cashed out 31.18 million US dollars' worth of Nvidia stocks again. Securities and Exchange Commission (SEC) filings show that on June 13th and 14th, Huang Renxun sold a total of 240,000 shares of stock, totaling 31.18 million US dollars. After the market close on Monday, Nvidia submitted a Form 144 to the SEC, with Huang Renxun expected to sell 120,000 shares of the company's stock on Monday (June 17th), expected to cash out $15.81 million. If this transaction is successfully implemented, relevant information will be available on the SEC in a few days. Huang Renxun set up a 10b5-1 stock selling plan on March 14th earlier, expecting to sell up to 600,000 shares of Nvidia stock by the end of March 2025. This suggests that Huang Renxun's share reduction behavior may be based on a pre-planned arrangement and may continue. At that time, Nvidia had not yet announced a stock split plan, theoretically, the number of Nvidia stocks that Huang Renxun will sell in the future may exceed 600,000. The word "sell" in the text should be translated as sell and the word "shareholding" should be translated as shareholding.

1

Huang Renxun cashed out Nvidia stocks

According to documents disclosed by the SEC, Nvidia CEO Huang Renxun sold a total of 240,000 shares of stock on June 13th and 14th, totaling $31.18 million. The word "stock" in the text should be translated as stocks.

After the market close on Monday, Nvidia submitted a Form 144 to the SEC, with Huang Renxun expected to sell 120,000 shares of the company's stock on Monday (June 17th), expected to cash out $15.81 million. If this transaction is successfully implemented, relevant information will be available on the SEC in a few days. The word "inflow" in the text should be translated as inflow.

Earlier on September 1st, 5th, and 6th, Huang Renxun exercised options and sold about 89,100 shares of Nvidia stock per day, totaling about 296,880 shares sold. From a short-term perspective, after Huang Renxun sold his Nvidia shares at around $48 after adjustment, Nvidia fluctuated and fell back in October of that year, reaching a low of $39.21/share. As the helm of Nvidia, Huang Renxun's timing still has some reference value. The word "options" in the text should be translated as options.

However, from a long-term perspective, Nvidia's stock price has skyrocketed more than three times since September last year. From the current perspective, due to strong performance and the stock split, Nvidia's stock price has risen more than 164% this year, entering the "$3 trillion club." Huang Renxun's share reduction this time could be based on a pre-planned arrangement and could continue. The word "shareholding" in the text should be translated as shareholding.

Nine months later, Huang Renxun began to reduce Nvidia's shareholding again at a high point. What signals are worth noting behind this? The word "technology" in the text should be translated as technology.

To answer this question, we can look at what happened after Huang Renxun reduced his Nvidia shareholding last time. The text can be translated as it is.

Huang Renxun exercised his options on September 1st, 5th, and 6th, 2023, selling about 89,100 shares of Nvidia's stock each day, totaling about 296,880 shares sold. The word "options" in the text should be translated as options.

From a short-term perspective, Huang Renxun sold his Nvidia stock at around $48 per share on an adjusted basis for a month. Nvidia oscillated and fell in October of that year, with a low of $39.21/share. As the helm of Nvidia, Huang Renxun's timing still has some reference value. The text in the original language can be translated as it is.

However, from a long-term perspective, Nvidia's stock price has risen more than three times since September last year. The text in the original language can be translated as it is.

(The content of this article is a list of objective data and information and does not constitute any investment advice)

From the current perspective, due to the strong performance and the stock split's weighting, Nvidia's stock price has risen more than 164% this year, entering the "$3 trillion club." The words "apple," "nvidia," "microsoft," "google," and "amazon" in the text should be translated as Apple, Nvidia, Microsoft, Google, and Amazon, respectively, and "s&p 500" should be translated as S&P 500.

Nine months later, Huang Renxun once again reduced his Nvidia stock. Are there any notable considerations behind this? Referring to the trend after the last reduction, does this mean that Nvidia will experience a short-term pullback? The word "sector" in the text should be translated as sector.

2

Nvidia may welcome an inflow of tens of billions of dollars.

It is worth noting that Nvidia may welcome an inflow of tens of billions of dollars in June. The words "ETF" and "etf" in the text should be translated as ETF.

The largest technology-themed ETF in the US stock market, the SPDR fund (XLK), with a current size of up to $72.2 billion, will rebalance quarterly this week to adjust equity weights. Public data shows that the SPDR fund tracks the technology select sector index of the S&P 500, which aims to effectively represent the technology sector of the S&P 500, including technology hardware, storage and peripheral equipment, software, communications equipment, semiconductors, and semiconductor equipment. Although Nvidia's share price has risen more than 160% this year, only 6.03% of Nvidia's shares are in the assets of the SPDR fund, while this ratio for the S&P 500 information technology tracked by the ETF is 22%. The words "stocks" and "semiconductors" in the text should be translated into their English counterparts.

The largest technology-themed ETF in the US stock market, the SPDR fund (XLK), with a current size of up to $72.2 billion, will rebalance quarterly this week to adjust equity weights. Public data shows that the SPDR fund tracks the technology select sector index of the S&P 500, which aims to effectively represent the technology sector of the S&P 500, including technology hardware, storage and peripheral equipment, software, communications equipment, semiconductors, and semiconductor equipment. The words "ETF," "S&P 500," and "technology select sector index" in the text should be translated as their English counterparts.

Although Nvidia's share price has risen more than 160% this year, only 6.03% of Nvidia's shares are in the assets of the SPDR fund, while this ratio for the S&P 500 information technology tracked by the ETF is 22%. The words "Amazon," "s&p 500," and "stocks" in the text should be translated as their English counterparts.

State Street's SPDR America research director Matt Bartolini said that XLK will be rebalanced according to its rules and methods. The ETF is obligated to track the S&P benchmark.

If the rebalancing is done according to the index, the positions of Apple and Nvidia in the SPDR fund will have completely different outcomes, with the former needing to decrease its weight to 4.5% and the latter's weight increasing to 20%.

An estimate shows that State Street will buy $11 billion of Nvidia stock and sell $12 billion of Apple stock.

The risk that comes with this is that once the market recognizes that the SPDR fund is going to rebalance, it is likely to preemptively buy or sell corresponding stocks, which may have an adverse impact on the ETF when adjusting its components, at the expense of ETF investors.

3

Buyers and sellers are beginning to diverge.

By now, have you quietly felt the risks of index investing?

Compiling an index by market cap weight means that the larger the company, the higher its weight in the index.

So what's the problem with that? Don't good companies deserve larger allocations as they grow?

For a highly index-based market like the US (where ETF index funds constitute nearly 30% of the market), as the trend towards top-heavy concentration grows with the increasing size of the MAG7 companies, ETFs need to buy more related component stock quotas, which will further magnify the top-heavy state of the US stock market and strengthen the trend.

Is this kind of market normal?

So far this year, the market value of the Mag7 stocks in the US has increased by $2.3 trillion, while the other 493 stocks in the S&P 500 index have evaporated by $720 billion over the same period.

This year to date, only 30% of the constituent stocks in the S&P 500 index have outperformed the large-cap index. According to historical statistics, this is only the second time since 1990 that such a low percentage of stocks have performed so poorly, the other time being during the dot-com bubble in 2000.

When a small number of stocks can shake the whole market, it also means that a few top tech stocks are having an increasingly significant impact on the U.S. stock market.

Faced with such an extreme situation, the buyers and sellers in the US have begun to diverge.

Many well-known Wall Street strategists are tirelessly raising their target prices for the S&P 500, while many hedge funds have begun to become increasingly cautious.

Following Goldman Sachs and Evercore ISI, Citigroup is the third investment bank to raise its target price for US stocks. Scott Kronath of Citigroup said that the rise in the share prices of the seven US tech giants may continue to push the S&P 500 index to new highs, and he raised the year-end target price of the S&P 500 index from 5100 points to 5600 points on Monday.

At the same time, according to a report from Goldman Sachs' main brokerage unit, the overall long/short leverage ratio (measuring its overall exposure to the market) of hedge funds has dropped by the largest margin since March 2022.

Goldman's data also shows that fund managers have net sold US tech stocks for three consecutive weeks as of June 7, with semiconductor and semiconductor equipment stocks nominally selling the most.

This time, the ship doesn't need to sink because, as everyone knows, everyone is on the same side.

This time, the ship does not have to sink, as everyone knows - everyone is on the same side.