It’s crystal clear – we’re witnessing Tech Bubble 2.0, and there’s one sector taking the spotlight: tech is outperforming everything else. But here’s the catch – within tech, SEMI outperformance is soaring to 2000 highs relative to $SPY, and it’s not all sunshine and rainbows. Some eye-opening charts are here to spill the beans.
Tech’s dominance is like a magician’s cloak, hiding a multitude of market warts, and it’s flirting dangerously with bubble territory. Brace yourselves because, in the midst of this tech dazzle, every other sector is trading like, well, complete garbage.
Now, here’s an interesting take – when things get this overstretched, some prefer to buy the garbage. Owning an SP500 fund? It’s essentially like holding a tech ETF. The top 7 components in it are all tech companies, representing a hefty 26% of its holdings.
The SPX, once viewed as a diversification instrument spreading risk across 500 companies, might not be the shield you thought it was. Tech’s overpowering presence is reshaping the game.
Are we headed for trouble in the tech paradise, or is this just a passing storm?
Sources:
Gm
Some greats charts here. Tech outperformance is hiding a lot of warts in the market and is in bubble territory.
Basically every other sector is trading like complete garbage.
I always prefer to buy the garbage when things get this overstretched. t.co/YunJE2tvNq
— QE Infinity (@StealthQE4) January 21, 2024
Owning an SP500 fund is no different than holding a tech etf.
The top 7 components are all tech companies and represent 26% of its holdings.
SPX should no longer be viewed as a diversification instrument
It’s no longer spreading risk across 500 companies to protect you pic.twitter.com/ELke5FE4UL
— QE Infinity (@StealthQE4) January 21, 2024
Billionaire investor & Bridgewater Associates Founder Ray Dalio on the 2024 Election and the potential impact on the markets: "I think they're both threatening for the markets." pic.twitter.com/lhUIKi1IgQ
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