Bubble Or Bust
Three months ago, SocGen's Manish Kabra dethroned BofA's Savita Subramanian to become Wall Street's largest bull.
In a testament to the inexorable character of 2024's US equity rally, Kabra's upgraded price target was 5500 SPX. So, a mere 12 weeks ago, 5500 counted not only as bullish, but exceedingly so -- enough to make Kabra the biggest optimist on the block.
Fast forward to the summer solstice and Kabra's forecast isn't the most bullish anymore. And the S&P briefly topped his year-end
How is it debatable that the Mag 7 have cyclical characteristics? What was 2022 all about then?
That.
But I was just looking at META quarterly YOY growth numbers and you got to admire tech companies. As an ad driven business, META ought to be pretty sensitive to the business cycle. And, yet, after 2 quarters of slightly negative growth, the company managed to print 5 quarters of growth, starting low but now above 20% for the last 3 quarters.
Show me a cyclical doing that. On Revenue, not EPS.
I’m not an expert on the definitions of growth and cyclical, but it seems to me that these are growth and duration stocks. They go up when growth is hot, but they also go up when the economy slows and interest rates go down. It makes sense to me why these mega caps sustain their valuations and keep the (stock) markets afloat.