2000 Here We Come?
"This is a very low probability event."
So said SocGen's Manish Kabra of a prospective dot-com bubble redux driven by an extension of 2023's A.I. frenzy.
Wells Fargo’s Chris Harvey, meanwhile, sees some potential for a late-90s rerun unless the Fed causes a recession -- inadvertently or otherwise -- even as he doesn't see much scope for additional equity upside in 2023.
Kabra raised his S&P target to 4,300 from 3,800. "There has been strong storytelling and momentum mania, with ‘AI bo
What if investors don’t care about recessions because everyone is front running the rate cuts (and QE?) that will start as soon as the data weakens?
i think the rally is more attributable to a recovery in earnings. just as the drop was attributable to a drop in earnings. the smart money is really smart at figuring this out. going back to the turn of the century the market started falling when smart money anticipated earnings falling even though consensus still had earning growing. i am amazed how good they are at predicting where actual earnings will be a year from now and acting on it . for instance in oct last year we all thought recession was around the corner and earnings would suffer. but smart money (not me sadly) knew earnings had bottomed and they were buyers. and they were rught as usual.i would give this uptrend a chance to continue until a solid break of the 200 day sma. i would use that as a signal that smart money is bailing. we have been above it long enough that a break would be significant. also the 20 month sma
i was reviewing the big market cap stocks that have contributed most of this year’s gains. some are clearly ai: nvda. msft. goog. crm. orcl
others are not clearly ai plays or had other narratives: aapl. brk (driven by appl). nflx. tsla. meta
what is also interesting is that chat gpt was released on nov 30. but msft goog nvda all fell with the market in december and only took off at the start of the year. remember how goog fell 5% after the bard presentation because of the false answers.
only meta crm orcl seem to have been in rally mode since nov 30. but none of them are associated with chat gpt and most people wouldn’t associate them with ai,
i think a lot of analysts who missed the rally are going sour grapes by calling it retail chasing ai or 0 dte options (a complete nonsense hypothesis) it really doesn’t stand up to scrutiny. it seems like a continuation of the crowding into mega caps that has been going on for years. another example is how jpm has held up while others like bac c wfc and gs have all gotten hit. investors continue to see these big names as quality and keep piling in
H-Man, Harvey clearly doesn’t go to the grocery store. Because if he did, he would be shocked. Pile a couple of items into the cart that barely feed your dog, let alone you, and say goodbye to a Benjamin.