Latest / Bull Market Conversations with Fexingo: Rallies, Momentum, and Riding Market Strength / How the Nasdaq Is Redefining Bull Market Leadership in 2026
Transcript
- Lucas: so the Nasdaq just hit 26,040, up almost three percent in the last five days, and I keep hearing people ask the same question — is this a broad-based rally or are we just watching a handful of stocks drag the whole index up? Luna: it's a fair question because if you look under the hood, the gains are really concentrated in a few mega-cap names and some high-growth software plays. Lucas: exactly. the Nasdaq is market-cap weighted, so a 19.7 percent week for Datadog or a 13.9 percent week for CrowdStrike moves the needle way more than a thousand small caps combined. Luna: and Cloudflare up 8.7 percent, Shopify up 9 percent — these aren't random. they're all riding the same wave of ai driven infrastructure demand. Lucas: right. the narrative is that enterprise software and cybersecurity are becoming the new defensive sectors in a bull market. but defensiveness usually means stable earnings and low volatility, and none of these names are low volatility. Luna: so what's the actual driver? is it earnings growth or just multiple expansion fueled by optimism? Lucas: I think it's a bit of both. real GDP growth came in at 2.1 percent annualized in the first quarter, up from 0.5 percent at the end of last year. that's a solid macro backdrop. Luna: and the fed funds rate has held steady at 3.63 percent since June. no rate cuts, no hikes. that's given the market some certainty. Lucas: so you have an economy that's growing at a decent clip, interest rates that aren't choking growth, and a bunch of companies that are positioned to benefit from the next wave of AI adoption. that's a recipe for a tech-led rally. Luna: but it's also a recipe for disappointment if those companies don't deliver on the earnings side. Datadog's rally last week was partly driven by a bullish note from an analyst, not necessarily a fundamental shift. Lucas: yeah, and that's where the bull market gets tricky. when sentiment drives price more than fundamentals, you have to ask how much is already priced in. Datadog trades at a price to earnings ratio well above the sector average. Luna: so for listeners who are thinking about adding exposure — is it better to buy the leaders or look for laggards that might catch up? Lucas: historically, in the early stages of a tech-driven bull run, the leaders keep leading until there's a clear catalyst for rotation. right now, I don't see one. the Fed is on hold, GDP is steady, and AI spending is accelerating. Luna: but the small cap index, the Russell 2000, is only up 0.2 percent over the last five days. that's a huge divergence from the Nasdaq's 2.7 percent. Lucas: that's a warning sign. breadth like that usually doesn't last forever. eventually, either the leaders pull back and the rest catch up, or the leaders keep going and the rest stay flat, and you get a two-tier market. Luna: which scenario do you think is more likely? Lucas: I lean toward a consolidation phase where the mega-cap names take a breather, and money rotates into sectors that haven't participated yet — maybe industrials, financials, or even some beaten-down value stocks. Luna: that's a classic mid-cycle move. but it requires a catalyst, like a shift in Fed language or a surprising economic data point. Lucas: right. and the data we have is pretty benign. inflation seems to have peaked in May, according to the Kalshi traders. energy prices fell in June. that gives the Fed room to stay on hold without sounding hawkish. Luna: so the bull case for tech remains intact, but the easy money might have been made. from here, it's about stock selection and valuation discipline. Lucas: that's exactly the kind of conversation we try to have on this show — specific, grounded, and free of hype. and speaking of that, we keep Bull Market Conversations ad-free by design. Luna: yeah, we don't run any ads. it's a conscious choice. if our conversations have helped you think about a trade or a trend differently, the simplest way to support that is a coffee at buy me a coffee dot com slash fexingo. Lucas: and that's it. no tiers, no perks, no pitch. just a way to keep the show what it is. so back to the market — one name I'm watching closely is CrowdStrike, because it's become a bellwether for cybersecurity demand. Luna: and with a 13.9 percent weekly gain, it's clearly benefiting from that same AI tailwind. but its valuation is even more stretched than Datadog's. Lucas: right. so the question is whether you believe the growth narrative justifies the multiple. I think for long-term holders, it might. but for traders, the risk of a sharp pullback is real. Luna: so maybe the takeaway is that this bull market is rewarding conviction in secular trends, but punishing complacency. you can't just buy the Nasdaq and ignore the individual stories. Lucas: that's the real message. the index is at a record, but the path to that record is narrow. understanding the companies behind the numbers is what separates a durable portfolio from a momentum trade that fades. Luna: and that's what we'll keep digging into — the specifics behind the rally, not just the rally itself.