The stock market is facing several problems: a repricing of tech stocks, an economic slowdown, a period of seasonal weakness, and an uncertain presidential outcome. Big-cap tech stocks are being repriced. That’s what happens when the market gets too tech-heavy. As the pros say, when there’s a correction in a concentrated market, you go up the stairs and down the elevator. Mega-cap tech stocks have been ripping up prices on the hopes of outsized profits. The problem, as the reaction to Alphabet’s earnings yesterday demonstrated, is that investors are beginning to realize that there’s still no big profit for AI infrastructure, that the return on investment, or ROI, from AI won’t materialize for a long time. The tech lords don’t seem too worried about that. Alphabet CEO Sundar Pichai has said he would rather overspend on capital than misread demand and underspend. Investors may not share the same sentiment. Regardless, investors have been reevaluating tech stocks for several weeks now. I noted several weeks ago that investors were concerned that while earnings of the largest tech stocks were continuing to rise, they weren’t growing as fast as they had been. Slowing earnings growth is a classic warning sign. This didn’t happen overnight. Tech stocks have been at a peak for some time. Many major tech indexes and exchange-traded funds are down double digits from recent highs. Technology ETFs (% from 52-week highs) Ark Innovation (ARKK): 18% Global X Cloud Computing ETF (CLOU): 17% VanEck Semiconductor (SMH): 15% S&P Technology Sector (XLK): 9% Vanguard Mega Cap Growth (MGK): 8% Global X Social Media (SOCL): 9% Invesco QQQ Trust (QQQ): 8% Semiconductors, which were the market leaders in the first quarter, were particularly weak. Semiconductors (% from 52-week high, and when they hit highs) AMD: 36% (March) Micron: 30% (June) Qualcomm: 21% (June) Nvidia: 19% (June) Broadcom: 18% (June) Economic weakness is also a problem Second, there are concerns about a slowing economy and the Fed potentially holding rates steady for too long. Former New York Federal Reserve Chairman Bill Dudley’s op-ed on Wednesday was the catalyst for this uneasy crowd. Dudley suddenly announced that “the facts have changed, so I’ve changed my mind” on the economy and called for the Fed to cut rates next week because the three-month average unemployment rate was rising. Don’t forget seasonality Seasonality is also a factor, as volatility tends to increase from mid-July through October. Goldman Sachs noted that the historical inflection date, the date when the S&P 500 starts to see more down days, is July 17, peaking in September but not really reversing until late October. “More neon green days in the summer future ahead,” Goldman said in the report. Watch ETF flows, they’ve been exceptionally strong One of the things that’s really helped markets this year is the steady and large inflows into equity ETFs, particularly simple index ETFs like the S&P 500. Matt Bartolini, head of SPDR Americas Research at State Street, noted $500 billion in inflows into ETFs so far this year, on track for a record year. ETFs already have about $10 trillion in assets under management. Watch the flows here for signs of weakness. It’s very typical for flows to dry up in August because everyone is on vacation. Does the election matter? Historically, most presidents don’t have a big effect on the stock market. However, this election could be different. Interestingly, “the S&P500 has been extremely correlated to Trump’s chances of victory of late,” Goldman wrote in the same report, noting that the recent shift in election odds, with Kamala Harris now the most likely Democratic candidate, could lead to some “recalibration” of portfolios. Sam Stovall, CFRA’s chief investment strategist, seems to agree. “The ‘certainty’ of the Trump operation appears to be fading,” he wrote in a note to clients. “In the short term, investors may end up paralyzed by indecision until clarity improves on a host of issues, such as industry regulation, health insurance, corporate and personal tax policy, and defense spending, to name a few.” It’s an interesting observation, and one more ingredient in this very delicate summer stew.
|
Sources
1/ https://Google.com/
2/ https://www.cnbc.com/2024/07/25/here-are-the-key-drivers-behind-the-recent-shakeup-in-stocks.html
The mention sources can contact us to remove/changing this article
|
What Are The Main Benefits Of Comparing Car Insurance Quotes Online
LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos
Related
