Fundamentals, technicals and sentiment aligned for a massive top in the ratio of US Tech Stocks vs the Broad Market here. Positioning and expectations of traders, hedge funds and everyone were shocked recently, with a massive rotation towards value stocks and commodities that caught everyone off guard. All the alpha collected during the year for Jim Simmons funds was erased in one day when the $PFE vaccine data came out. Now we keep getting more fundamental boosts to the notion that lockdowns are a thing of the past...or will be very soon.
This puts pressure on inflation expectations here, due to unprecedented stimulus and currency debasing that we endured globally, so the pre existing trends that were born out of a deflationary phase are in danger of reversing dramatically. Tech/Growth stocks, a long time favorite of investors since 2009 might be at a peak vs Value stocks and commodities, Sovereign bonds are likely a huge short, with a massive debt bubble in all of the world, as interest rates are set to move higher from here onwards as a response to ballooning deficits and govt spending as a response to the pandemic emergency. Returning to normal will kickstart inflation that was delayed only by an artificial hibernation of economic output, but was already visible in certain goods, just not in energy yet.
Energy stocks are largely mispriced, with fund managers love for renewable/solar/EV vehicles as the objective of the massive funds they divested from energy for a long time. I don't think $TSLA itself is a bad investment as it can continue to grow due to spectacular fundamentals, but the pace of growth in these investments will likely underperform the recovery in oil, airlines, energy, value names, etc. going forward.
Vaccine stocks are likely to perform well for now, given strong technical signals in both $PFE and $MRNA, but I am not invested in them personally, although it would be interesting to monitor for opportunities.
Refer to my Crude Oil publication below for more insights on the technical chart of oil.
Cheers!
Ivan Labrie.
This puts pressure on inflation expectations here, due to unprecedented stimulus and currency debasing that we endured globally, so the pre existing trends that were born out of a deflationary phase are in danger of reversing dramatically. Tech/Growth stocks, a long time favorite of investors since 2009 might be at a peak vs Value stocks and commodities, Sovereign bonds are likely a huge short, with a massive debt bubble in all of the world, as interest rates are set to move higher from here onwards as a response to ballooning deficits and govt spending as a response to the pandemic emergency. Returning to normal will kickstart inflation that was delayed only by an artificial hibernation of economic output, but was already visible in certain goods, just not in energy yet.
Energy stocks are largely mispriced, with fund managers love for renewable/solar/EV vehicles as the objective of the massive funds they divested from energy for a long time. I don't think $TSLA itself is a bad investment as it can continue to grow due to spectacular fundamentals, but the pace of growth in these investments will likely underperform the recovery in oil, airlines, energy, value names, etc. going forward.
Vaccine stocks are likely to perform well for now, given strong technical signals in both $PFE and $MRNA, but I am not invested in them personally, although it would be interesting to monitor for opportunities.
Refer to my Crude Oil publication below for more insights on the technical chart of oil.
Cheers!
Ivan Labrie.
