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Hey everyone, meet Kevin here. We are in the middle of a coupon code expiration evening and a market melt up. I kid you not. Take a look at this. Goldman Sachs US volatility panic index panic index has crashed closing in on one of the lowest levels we have seen in a quote long time. I don't actually hasn't been that long but that you know last happened here in December and then happened again in December before that.
So December 25 and December 24 with these high levels of complacency. So think about the lower this line is, the more complacent the market is. In other words, very little hedging, a lot of call buying, potentially more debt. We're seeing the Taiwanese market and the Korean markets becoming some of the most parabolic markets driven of course by SK Hynix and chip manufacturing thanks to the memory and semiconductor boom.
Take a look at this. You've got to see SOX for example. SOX is a semiconductor ETF. This semiconductor ETF right here since January is up nearly double. And you might think this is the leveraged one that I pointed out at the beginning of April when I pitched the hardware rally. No, that's actually this one right here.
That one started the year out at about $54. That one's up about 4 and 1/2 X at the moment. It's triple leveraged so the drawdowns can be pretty extreme. But that's pretty remarkable what's happening in hardware right now and there's really no hardware that's being spared. Take a look again, Marvell not only smashes through 200 today up 6% but in the overnights now sits at $216 up another $8.
And we've been pointing this one out in our course membership, the alpha membership, the same one the coupon code is expiring for at meetkevin.com for a while as still one that has legs in the hardware rally. You always have to remember there are different time frames for different stocks. For example, we're going to talk in a moment about some people who are calling a bottom in software, though I find it hard to believe given that Zscaler just missed its forecast and they're down 21%.
So, I'm not convinced software is at a bottom yet. I think there's still some work to do over there. But, a stock like Enphase, I think it's shooting straight up towards breaking through the 75-80 line. And since we called it out last Tuesday, we've been right about it. So, what's going on broadly in the market?
What is this talk about a melt-up and what kind of data do we have to potentially support this? Well, let's go look at it. The very first thing we have to see is in addition to that Goldman Sachs is sort of a complacency indicator. They have sort of an inverse version of this, which is called the risk appetite indicator.
And it's in the 99th percentile comparing all the way back to 1991, which means it has happened before, but it you know, you're in that 1% window where people are going all in, high complacency, and it just makes you wonder, are we potentially at risk of getting diluted by share issuance? Take a look at this.
These are the expected share issuance in 2026. This is going We are expected to see the highest amount of shares issued in 2026 that we have seen ever in the history of the stock market. The second highest was over here in 2021 at just over $500 billion. We expect to surpass $600 billion this year, well up from $300 billion last year or about 280 before that or just under $200 billion the year before that.
That's money that has to come from somewhere. People have to either sell stocks or they have to come up with money and take it to go invest into stocks like chat, you know, open AI, chat GPT, you know, whether you're buying Google to get exposure to Gemini or you're waiting for the Anthropic IPO or the SpaceX IPO or the host of other IPOs that are coming, whether it's the Aura Ring that I'm wearing or plenty of other startups that are coming.
A lot of money is expected to be issued in the form of shares. That has to come from somewhere. In other words, unless we print a whole lot more money, which in fairness the money supply is expanding and it's expected to continue to expanding. Well, the Fed already U-turned on that and so they could turn the vacuum cleaner off and they started printing more money.
Anyway, really topic for a different video. That pie of money better start expanding because we're about to divide it into smaller slices. And when markets are at all-time highs and we're about to see a substantial increase in the amount of share issuance, we have to wonder what's supporting all of this.
Well, so far it's been earnings. If you look at earnings revisions, corporate guidance, dividends, mergers and acquisitions activity, the overall backdrop for the market year is not bullish. It is actually unusually bullish. In other words, things actually look really freaking good when it comes to earnings.
And I hate to say it, but there's in my opinion a very clear reason for this. And this is the same thing we talk about. We've talked about this many times before in the course membership and join me kevin.com we do this sort of fundamental deep dive analysis. We think that deep about not just short-term trades, medium trades, long-term trades, but also fundamental analysis for 10-year plays or even swing trades.
It all comes together, technicals and fundamentals together. You can join using that coupon code at mekevin.com. I think it is all driven by the fact that AI does this. AI takes money from workers who get displaced and makes companies richer with new AI-infused services that yes can provide more value potentially, but you are definitely firing one group of workers to give money mostly in my opinion to corporations.
That's at least the premise behind basically bags on Phoenix. It says that Phoenix has become the call center capital of the world. And the call center capital of the world was actually a place that a lot of workers went after factory jobs got eliminated because we started outsourcing through globalism to China and India or otherwise.
And so 50 years ago, factory jobs offered a path to the middle class for millions of Americans who didn't have college degrees. As those jobs disappeared, people moved into lower-skilled cubicle gigs to help fill the void. Customer service for Apple, for AT&T, Verizon, whatever. And these are stressful jobs with very high turnover.
And the issue with very high turnover is you don't actually end up seeing these people lose jobs in mass layoffs. Instead, as they write here in the Wall Street Journal, companies have taken advantage of the industry's high churn and they simply cut head count by not replacing workers. So in other words, companies get the same thing done by weaponizing essentially fewer people with artificial intelligence to protect their profit margins and expand their profit margins while at the same time not making the news for mass layoffs and people are losing their jobs.
Now, is it likely that other people are making or getting jobs more easily because of AI? Yeah, totally. I think there are a lot of entrepreneurs, grinders, hard workers, anybody can do this who are people who are utilizing AI to provide value in a way that was never possible before towards other companies.
And the winners here are probably disproportionately still the companies. While those employees should get rewarded with more pay or more stock options and they deserve that. The spoils I would argue from artificial intelligence disproportionately go to the mega-rich, the metas, the Microsoft, the Google's, whatever.
And even if their stocks aren't at all-time highs, as soon as they flip the switch on capex spending, the amount of money that they make will be very clearly ungodly. Artificial intelligence is accelerating that profitability. And that's why we're seeing an artificial intelligence-led melt up. That's why we are seeing earnings revisions that are going to go up, up, and away.
Look at this jump in earnings. We're looking at S&P 500 earnings going in 2025 or you know, from 2024. That's 271 divided by 243, up about 11.5%. Okay, look at the estimate for 2026. 334 divided by 271, leaving decimals off. And what do you get? You get a coupon code over at mekevin.com. No, you get double the growth rate that you had between 2024 and 25.
You just doubled it to 23.2%. The workers are the losers. This is why labor force participation is falling because people are getting they're turning into long-term unemployed. They can't get a job because they need to get reskilled. It's hard to get reskilled when our freaking labor force education system sucks.
In other words, our schools, right? Our schools don't teach us how to get a job. I mean, I ran for governor in California under the premise that we would have schools that would actually teach people how to get a job when they graduate school rather than have no clue how to get a job. You know, actually imagine that, a school that could actually teach people how to get a job when you graduate.
I'm talking about high school. It's crazy. If we look at the 20 26 weeks unemployed on the St. Louis Fred, we can see that chart is rising. That chart usually rises in recessionary times. Every single time in history it has risen during recessionary times, which are these little blue lines over here.
And now it's suddenly happening without a recession. Why? Because it's a recession for the people. The call center workers, the middle Americans who now need to all of a sudden grind all over again and reskill themselves. And what's propping everything up are earnings that are going to massive corporations, the stock market, and that's being recycled into artificial intelligence.
More chips, more spending, more memory. This isn't to be like pedantic about, "Oh, you know, AI is bad. All the money is going to rich companies." Honestly, it's it's just designed to be blunt. Artificial intelligence makes companies richer. And you either have to figure out how to weaponize artificial intelligence to join those companies, to provide as much value as you can as a human, or you're going to get screwed.
And it's a harsh and blunt reality. Like, if you're a bookkeeper who's using AI, you can make more money than 10 other bookkeepers who aren't using AI because a human in the loop with artificial intelligence is dangerous. The attorney who uses AI can do five times as much casework than the attorney who does it.
It just is what it is. Maybe even more than that. And companies know that and they're the ones profiting. That's why we are seeing a melt up. That's why my estimate for the NASDAQ 100 was absolutely smashed. We broke right through my prediction for not just last month, but also this month for a price target for the NASDAQ 100.
That's in our course membership. Remember, you get that. , all nine courses, taxes, uh you know, it could be a tax deduction that is. Tax professionals say this could be a tax write-off for you. Uh m , diversification, financial insights, you name it. Everything's in here. The point is the same company that is pointing out this potential melt up that's happening, the marketeer, is also now pointing out that potentially IGV could be a buy the dip opportunity.
Now, IGV is very interesting because they're trying to call a software bottom with IGV. They're suggesting that IGV has in the last few weeks bottomed and that it's up from here. We can see volumes have absolutely exploded. It's actually almost returned to overbought on the daily. On the weekly, we're still only mid-range.
I prefer the weekly. But IGV is an index, well, it's an ETF, uh that is made up I put this on the yellow chart here. It's made up of Microsoft, Oracle, Palantir, Salesforce, PAN, uh Palo Alto Networks, uh Apple 11, uh CrowdStrike cybersecurity, Adobe, Intuit, and Synopsys. I'm personally not the biggest fan of Oracle in this list, but I do think the rest of the basket is actually decent.
I'm not also the biggest fan of Salesforce. I think they still have to prove their pricing power, but the other stocks are actually great like I hate to say it, but Microsoft's looking great, Palantir's looking great, AppLovin's looking fantastic. Dude, we were buying this in the course in the 300s.
And I remember when we were buying it in the 300s, people were mad. They're like, "Why are you buying this in the 300s?" It was like over here somewhere. And I'm like, "Cuz it's a good stock." Sucker's already up at $514. Just an example of one of the trade alerts we send. But, software overall, I don't know if we're at a bottom yet.
I mean, there are like Intuit has there's no bottom on Intuit. And I have not personally called for a bottom on Intuit on this channel, in my courses, or anywhere. I think, unfortunately, software probably won't bottom until after the SpaceX IPO. But, it's interesting to say to see this because they here are saying, "We turned bullish on software as a tactical bounce trade a few weeks ago.
The bounce is already delivered, but it may very well be time to increase this long," they say. Well, that's pretty ballsy in my opinion, but I have to agree with their valuations. Look at this. Software has never been this cheap going all the way back to 2013. So, in other words, here on the right, May 26th, going all the way back to 2013, software's never been this cheap.
Actually pretty freaking remarkable. And if we look at uh shorts in software, we are nearly at the 100% tile, creating, as we like to say, a squeeze risk. Ready to get squoze. Yeah. So anyway, like I said, I'm I'm not I don't want to be like pedantic or lecture you over "Hey, you better grind. You better work hard." And I'm going to share something personal here to like the five of you who actually stayed to the end of the video.
Today was a really hard day for me. Um it has nothing to do with the fact that things go expire. Um it's actually been a little bit of a devastating day because I have a German cousin uh that uh I've been meaning to visit. He moved from uh Germany after four decades uh working with his family to run the family business.
And I remember as a child admiring the work ethic of uh him, Patrick, and his brother, Dominic, uh and their father, Peter. Uh they've always been uh an inspiration to me. Uh a lot of people know I make pee-pee jokes. Uh you know, pricing power, whatever. Uh but um I think one of the first places I I really sort of um came to like the phrase was seeing the work ethic of uh essentially my uncle, uh Peter.
Uh and his license plate was for each of his cars, PP1, PP2, PP3, whatever, because it's Peter Pafrath, right? Like that's pretty cool. So, uh I always thought that this was this was really cool, high work ethic family, and um uh Patrick moved to Bali uh to be uh you know, a a scuba diving instructor uh while he was still able to operate uh his chores in the family business uh from afar because frankly, they built a pretty good machine as far as I can tell from, you know, the outside looking in.
I don't know all the details. But the point of this story is to say that these were people uh and our people who have always been a really cool inspiration to me for entrepreneurship. And I've always promised myself that I want to go to Bali and visit. I I want to see what he's doing there. I want to see what's going on.
Like these folks have been an inspiration to me and I haven't seen Patrick in like 8 years. And I still remember the last time I was with him. It was It was fantastic. I was there with Lauren and and we had a fantastic time and very straight shooter, honest, good guy. Uh and unfortunately at 53 Patrick just died today.
Well, yesterday our time uh in a freak accident. And I never made it there to see him. So, you know, here it is, 8 years and I'm busy growing a YouTube channel or becoming a financial advisor or ringing the bell at the New York Stock Exchange or getting a securities license with FINRA or all the security licenses at FINRA or getting my lending license again, starting reinvesting in a house hack, becoming a licensed pilot and instrument rated and then a multi-engine rated pilot and then jet rated and then I'm going to get my boater's card, too.
And then I've had six kids. And all this crap to grind and I couldn't make it to meet him in Bali in 8 years. That devastates me. It breaks my heart. I really regret this. You know, this whole like work work work thing is our American dream and and I hate to say it because in a weird way now you almost have to work hard to adapt to AI because the corporations are going to take all the freaking money.
And that's actually like the most bullish thing for the stock market. It's just really bearish for people. Everyone deserves love. Everyone deserves a hug. Even if it's a short visit, go visit your family. I'm probably going to go visit my family pretty soon now. I have to send some messages and coordinate some things, but say hello to someone you love. You never know. It might be the last time.
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