NASDAQ Officially Enters a Bull Market 🐂

The NASDAQ 100 has officially entered a bull market, signaling a major shift in market sentiment since 2022. This milestone was hit at the end of the trading day on Wednesday after the index ended the day up more than 20% from its Dec. 28 closing low. The recent rally is a remarkable turnaround from the index's underperformance in 2022, when it fell ~33%.

The index’s peers have performed worse by comparison: the S&P 500 Index is up only 4.9% this year, and the Dow Jones is down 1.3%. The Nasdaq 100’s rally is driven by the tech mega-caps, which make up the bulk of the index:

• 💻 Microsoft is up ~19% YTD (12.5% of the index)

• 📱 Apple is up ~30% YTD (12.3% of the index)

• 🛍️ Amazon is up ~19% YTD (6.2% of the index)

• 🤖 Nvidia is up ~91% YTD (5.2% of the index)

• 🔤 Alphabet is up ~13% YTD (3.7% of the index)

Michael Burry Changes His Mind 🤔

Adding to this positive sentiment, Michael Burry, the famous investor known for his bet against the housing market before the 2008 financial crisis, publicly changed his outlook on the market.

In a tweet, Burry admitted, “I was wrong to say sell,” referring to a tweet on Jan 31 when he tweeted, “Sell.”

A Historic Year for Buying the Dip 💸

2023 is “shaping up to be the second best year for the dip-buying strategy,” as investors see the market decline as a buying opportunity. This dip-buying strategy has contributed to the stock market's impressive recovery.

Burry himself commented on the dip-buying phenomenon. In a tweet on Jan 5, Burry wrote, "Going back to the 1920s, there has been no BTFD (Buy The F******* Dip) generation like you. Congratulations."

• 📈 The market has now fully erased its losses after the collapse of several regional banks three weeks ago.

• 🌟 Firms with the riskiest credit have become the latest winners, poised for their best week since January.

• 🔄 Dip-buyers have been quick to capitalize on market downturns, contributing to the market's ability to bounce back.

Lululemon Delivers Strong Q4 Earnings 🧘

Lululemon ($LULU) announced impressive Q4 results on Tuesday, causing the stock to shoot up over 12%.

The CEO of Lululemon, Calvin McDonald, emphasized the company’s innovative products, powerful guest experiences, and strategic market expansion as key drivers of their strong performance. Q4 saw a 35% increase in international net revenue and a 39% increase in direct-to-consumer net revenue, further solidifying Lululemon’s position in the global market.

Looking ahead, Lululemon is poised to continue its "Power of Three" growth plan, which aims to double its business from 2021 revenue of $6.25 billion to $12.5 billion by 2026.

Key highlights from Lululemon's earnings report:

• 📈 Fourth quarter revenue increased 30% to $2.8 billion.

• 💪 Full-year revenue soared 30% to $8.1 billion.

• 🌎 International net revenue increased 35% in Q4.

• 🛍️ Direct-to-consumer net revenue represented 52% of total net revenue in Q4.

• 📊 Adjusted EPS for Q4 reached $4.40, up from $3.37 in Q4 of 2021.

• 🪞 The $500M acquisition of ‘Mirror’ was written down to basically $0, marking an embarrassing mistake in an otherwise strong record.

Top Discussion This Week 🎙

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🗞️ What else you might’ve missed:

• Apple announces the date for their WWDC event.

• Disney cuts their entire Metaverse team.

• AMC jumps ~10% after rumors of potential Amazon acquisition.

• Alibaba to split up into 6 separate businesses.

• Bed Bath & Beyond is down ~25% after poor earnings.