Is buyer's fatigue setting in with tech Mega caps? 🤔
Yesterday core and headline US inflation were below estimates and, as to be expected, bond yields dropped and gold rallied. More interestingly, however, the tech ladened NASDAQ fell almost 3%. Usually a drop in yields would support longer duration assets, such as highly valued tech stocks, but this did not come to pass. Is this symptomatic of buyer's fatigue after the inexorable rise of a few tech darlings that dominate the indices?
It is always unwise to read too much into one day's market movements. I would highlight, however, that we have seen a marked shift in our equity market indicators in the last two months. We have taken profits in both our large cap growth and NASDAQ positions to move overweight both the value segment and defensive low volatility equities.
Whether or not yesterday's market 'divergence' will prove to be significant is impossible to tell at this stage. The market environment, however, is somewhat troubling. We have lofty valuations in equities at a time when credit spreads are turning higher, volatility is picking up and many market breadth measures are poor. Summer is also not a great time to be long risk so dust off your defensive playbook and book some profits in your tech stocks, they will have undoubtedly become an outsized allocation in your portfolio.
Feel free to get in touch me with any of the team here at NFG Partners SA if you would like more colour on our strategy, positioning and peer group leading track record since 2016.
Bon weekend!
#AI #Techinvesting #investing #stocks #investmentmanagement #wealthmanagement
