Nasdaq Index was down in 6 out of 7 last weeks
Nasdaq Index was down in 6 out of 7 last weeks
Is the AI bubble bursting? Is there a bubble at all?
Hi everyone,
In the last three months, inflation data in the US has been surprising to the upside as was outlined below:
In effect, the Fed officials have started to backtrack their previous rate cut expectations suggesting higher for longer policy is back. These are a few US central bank policymakers’ comments during this week:
Chair Jerome Powell: There has been a 'lack of further progress' on inflation. Fed can keep interest rates high 'as long as needed' as recent data show it's 'likely to take longer than expected'.
Williams: Even a rate hike is possible if warranted but it is not a baseline expectation.
Bostic: It might be not appropriate to ease until the end of 2024.
Kashkari: The Fed may hold rates steady all year.
Goolsbee: So far in 2024, that progress on inflation has stalled. You never want to make too much of any one month’s data, especially inflation, which is a noisy series, but after three months of this, it can’t be dismissed. Right now, it makes sense to wait and get more clarity before moving.
As a result, markets reacted with Treasury yields rising and main stock indexes falling. The S&P 500 is down more than 5% from its peak. The Nasdaq index was down 6 out of 7 weeks.
Moreover, Magnificent Seven broke below the 50-day moving average for the first time since October 2023, and from the top, the group has lost more than $1 trillion in market capitalization.
On April 4, paid subscribers received a warning about the US technology stocks, their concentration risks as well as where their valuations stand. Please find the excerpt below:
And link to the full analysis:
As you can see, an opportunity was clearly there. We don’t know whether it is a short-term correction or a similar price action like in 2022 but we’ll keep our subscribers updated.
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Global Markets Investor