Big Tech tumbles—and crypto sinks with it

May 11, 2021, 9:42 AM UTC

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Good morning.

Big Tech is really taking it on the chin. SOX, the closely watched PHLX Semiconductor Index, and the FANG+ Index sunk into correction territory yesterday, and tech futures are down again this morning.

That tech sell-off is looking contagious, hitting Europe and Asia shares.

The risk-off mood is pervading crypto, too. Bitcoin, Ethereum and Dogecoin are all down, in some cases significantly.

Let’s check in on the rest of the markets action.

Markets update


  • Things don’t look good in Asia. The Nikkei is down 3.1% as the tech sell-off goes global.
  • Among the biggest losers in the tech rout are Taiwan Semiconductor Manufacturing and Samsung.
  • Inflation fears are spooking the markets, and China‘s latest pricing data didn’t help soothe those fears with factory prices surging to a three-year high.


  • It’s a risk-off day in Europe too with the European bourses down out of the gates. The Stoxx Europe 600 off by 0.9% at the open.
  • The Russian ruble, a bellwether for U.S.-Russian relations, fell on Monday as the FBI pinned the damaging Colonial Pipeline cyber attack on a Russian-speaking ransomware gang.


  • U.S. futures are edging lower this morning. Nasdaq 100 stocks got clobbered yesterday with Facebook off more than 4% and Amazon and Netflix down by more than 3%.
  • Cathie Wood‘s stock picks have been particularly vulnerable to this slump. Her biggest holding, Tesla fell 6.4% on Monday, enough to shave 5.2% off her Ark Innovation ETF.
  • About the only good news for stock bulls is that the dollar and bond yields are barely budging. Now if they were to spike… I won’t finish that thought.


  • Gold is down, but it’s had a good May, trading around $1,835/ounce.
  • The dollar is trading sideways.
  • Crude is down with Brent trading below $68/barrel.
  • The crypto screen is awash in red. Bitcoin is down more than 5%, trading below $56,000.
  • Bull Sheet readers tell me they want more price updates on not just lumber, but copper and 🌽 too. I’m surprised nobody has asked me for 🐖 prices. Lean hogs futures top the Wall Street Journal commodities leader board, suggesting it will cost you a bit more to bring home the bacon. 🥓


Wasted on the youth

It was after I moved to Italy, some 16-odd years ago, that I first started paying attention to the term “youth precariat.” A growing number of economists, demographers and policy makers invoked it to warn that a significant rich/poor gap was emerging between Italy’s 20- and 30-somethings, and their parents.

The jobs market for university grads has been pretty lousy here for some time, and so the best and brightest routinely leave Italy for neighboring countries where the pay is better (and, as a tradeoff, the food and weather is decidedly worse.) The brain drain has robbed the country of its most important asset: its youthful smarts. To reverse Italy’s low-growth, low-productivity rut, these same economists say, you first need to reverse the brain drain. Meanwhile, the number of Italians pushing 35 who were still living at home was among the highest in the developed world.

I chalked the whole dilemma up to a Southern Europe thing. I was wrong. Very wrong.

In 2016, a group of U.S. economists crunched the numbers on U.S. households going back to 1940. They found a troubling youth precariat right under their nose in the U.S. “It’s a scary issue,” Harvard economist and co-author of the research, Nathaniel Hendren, told me a few years ago. Hendren laid out the numbers to show me that Americans, generation by generation, were increasingly earning less than their parents.

The gap got most pronounced after 1980, their research showed. That’s when the idea of an American Dream all but vanished for Americans in large parts of the country. Not surprisingly, the paper is titled, “The Fading American Dream.”

Why am I mentioning this downer research in the middle of a decade-long bull rally?

Because I have some new data on the subject. Turns out the pandemic is making this generational inequality gap—wait for it—worse for American millennials.

COVID has sent a lot of young millennials back home to live with their parents. I truly marvel (and cringe) at this finding. In my twenties, I lived with buddies, and then with a girlfriend, and then on my own. And I repeated this pattern for years. Apparently, such a scenario is becoming rarer and rarer.

“While the majority of Millennials are living with a significant other, the pandemic brought about a reversal of the previous multi-year downward trend in the percentage that live with their parents,” BofA Equities analysts wrote in its latest annual survey measuring this social trend. “Our survey responses, which showed an uptick from April 2019 (9%) to April 2021 (14%) suggest that the pandemic set Millennials back by about five years in the trend of independence from their parents.”

Five years! When I was their age, five years sounded like an eternity.

BofA touched on some of the reasons for this trend, none of which will surprise you. Home prices are skyrocketing. The labor market is uncertain, as is the income levels of this group. The good news is they’re saving more money, and the urge to buy a house, and maybe start a family, is undiminished. Still, this cohort acknowledges, they won’t be able to leave mom and dad’s basement for the foreseeable future.

Sitting on the sideline for a few years doesn’t sound like a great strategy for a future homebuyer.

Some of this may explain the news we saw last week: that the U.S. birth rate fell to another record low last year, a development that economists find alarming.

Yep, I’ve been reading headlines like that here in Italy for the past 16 years.



At 6:30 this morning I was on the phone with Nepal, chatting to my older brother, Chris, about his latest adventure. When I called, he was doing laps on the roof of a hotel in Kathmandu, a city that’s under severe lockdown. The airports there have been closed for days, and the only ticket out of town he could find is stamped for May 29.

He’s hoping to get a new ticket once the airport opens on Friday. Until then, he’s kinda stranded.

I have to be honest, dear reader. If I had the choice to read a daily dispatch from one of the Warner brothers, I’d sign up for his. He’s the one with the great tales.

Last month, he summited Annapurna. (I’ve lost track of how many 8,000-meter peaks he’s climbed over the years, and the number of mountaineering achievements and honors he holds.) After Annapurna, he headed over to nearby Dhaulagiri. That’s when COVID struck. It ripped through base camp, and sent everyone home.

Vaccinated, he was spared the worst. And so he’s now stranded in Kathmandu. Hearing this, my wife sent him an email instructing him how he can use his free time to help out some of their local missions in Nepal. The country has been hard hit by COVID, and NGOs have been asked to help broadcast the call for medical supplies to help the country cope with a fast moving crisis.

If you want to read more about the situation in Nepal, Human Rights Watch has an important rundown.

Tomorrow, I’ll keep the newsletter focused to the markets. Promise.

Bernhard Warner

As always, you can write to or reply to this email with suggestions and feedback.

Today's read

Big Energy = big target. To those in the oil and gas industry, the crippling Colonial Pipeline hack came as no surprise. Regulators and cyber pros have been warning of this worst-case scenario for years. That it happened, and that it inflicted such damage, is sending ripple effects throughout the industry, Fortune's Katherine Dunn reports.

Can of corn. The commodities rally is hitting closer and closer to home. A bushel of corn now costs twice what it did a year ago. That price is being passed on to consumers, and it's not just hitting 🌮 and tortilla chips. Corn prices impacts the feed market, and could influence the price at the pump, too.

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Market candy

Quote of the day

They are seen as bellwether names for global growth. In other words, if you look at all the areas they’re in—5G, cybersecurity, cloud, gaming—it’s so broad.

That's Quincy Krosby of Prudential Financial, speaking to the Wall Street Journal yesterday about the implications for the plunge in semiconductor stocks. Big Tech was the engine behind last year's rally. This year, it's another story. A tech stock slump, some fear, could have widespread implications on the markets.

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