The unexpected rally
TO at the beginning of the year no one was betting on technology as the winning horse for this 2023 stock market. The monetary tightening, on paper, should have deflated what some analysts suspect to be yet another bubble. Instead, the 17% jump achieved so far by the S&P500 is largely due to this sector. Or, more precisely, to the Magnificent Seven, tech giants capable of bringing the US blue chip index to a distance of just 6 percentage points from its maximum peak in January 2022: we are talking about Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta and Tesla. Seven names that alone account for 29% of the main American basket and taken together, calculates Goldman Sachs, have gained 71% since the beginning of the year, compared to a return of just 6% for the remaining 493 stocks. If the 500 companies represented in the S&P500 had the exact same weight, the index would have gained only 2% this year. Are we on the edge of that irrational exuberance theorized by Nobel Prize winner Rober Shiller to explain speculative dynamics? It is a mistake to treat the seven stocks in question as if they were a homogeneous block, warns Alison Porter, manager of the global technology leaders team at Janus Henderson Investors.
LAWS HERE THE CARDS ON THE SME RALLY IN PIAZZA AFFARI: + 37%
Nov 20, 2023
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