Santoli’s Monday wrap-up: Bull markets peak on good news, but not today

(These are the market notes on today’s action by Mike Santoli, CNBC’s Senior Markets Commentator.) They say bull markets peak on good news, but not today. OpenAI’s latest gargantuan commitment for computing capacity via AMD chips – one that will be largely financed through a 10% equity position in AMD that was granted to Open AI — again punished anyone who bet that the AI hype was fully priced in. The brute force of the $1 trillion-plus in infrastructure commitments over the next several years has been too much for the immediate skepticism about the unfunded promises and overlapping spender/vendor relationships to offset. Indeed, the story of the market this year can be framed as trillions in capital and spending power being unleashed by the private sector and governments (Germany with a half-trillion-euro military tab, Japan shifting to fiscal expansion with a leadership switch). That said, the action Monday was respectable but uneven, with AMD adding some $70 billion in market value to contribute a third of the S & P 500’s roughly half-percent gain on the day, while Nvidia shed more than $40 billion as the search for scarce processing resources widens. More than half of NYSE stocks were lower on the day. The way this is all manifesting now is in a stock market led by high-volatility/low-quality stocks alongside a rush for gold and bitcoin as stores of value acting like momentum vehicles. This is both typical of strong, maturing bull markets and evidence of some extreme behavior that can generate eventual instability. Here’s the S & P 500 Quality ETF – companies with strong financials, clean balance sheets and durable profit margins – relative to the broader S & P 500, matching a ten-year low in relative performance. The broad debate seems to be between those saying