The Nasdaq 100 Index is experiencing a surge in speculative activity, highlighted by the inclusion of MicroStrategy, which has contributed to a broader trend of high valuations and speculative investments. This development suggests a potential market bubble, as the index continues to rise despite the S&P 500's negative breadth. The disconnect between asset prices and traditional valuation metrics is becoming more pronounced, raising concerns about the sustainability of current market levels. The rise of speculative stocks, while the broader S&P 500 lags, indicates a possible mispricing relative to fundamentals, which could be exacerbated by the Federal Reserve's anticipated "hawkish cut."
The ProShares UltraPro Short QQQ ETF (SQQQ) has seen a decline, dropping 2.83% to $28.11 as of 10:40 AM on Monday, December 16.