Its called algos boys with central bank backing, via QE forever haaaaaaaaaaaaaaaaaaaaa DUHHHHHHHHHHHHHHHH
because as Bloomberg puts it, aside from the stock price itself, "everywhere else you look in the industry, bad news is overwhelming the good."
Here's why Wall Street is puzzled: even as tech stocks soar, with the Nasdaq up 5 of the last 6 trading sessions, tech profits are shrinking "at an alarming pace", valuations are reflating and politicians want to break the companies up. Worse, as we reported last week, Samsung previewed a dismal quarter for semiconductor orders which have collapsed, while spending on infrastructure to support the all-important "cloud" is off. And yet, as Bloomberg puts it, "the addiction won’t break."
Of course, it is hardly news to anyone that fundamentals no longer matter in a market where central banks have greenlighted a scramble into the riskiest of growth stocks, and where too much money has been lost by sitting out, and where as Morgan Stanley chief equity strategist Mike Wilson warned that groupthink - and FOMO- has taking over; it is this FOMO that while creating furious rallies, also precedes a cycle’s peak.
“I can’t remember a time in my career when institutional investors have been so preoccupied with what everyone else is doing,” Wilson said, who for the second time in the past year is advising investors to avoid tech stocks. "When investors are more focused on what everyone else is doing, rather than what the fundamentals are doing, it’s probably the end of a trend."
And yet, as Bloomberg points out, "if this is the end, it’s been a tough one to miss". Consider the following:
the Nasdaq 100 just rose for the 14th time in 15 weeks and is about one big day away from its August record
Fourteen companies, among them chip standard-bearer Advanced Micro Devices Inc. and Lam Research Corp., are up more than 50 percent from their Christmas lows,
only seven stocks in the gauge are down over the stretch.
Looking at the above, one might expect tech companies to report blockbuster result in Q1. They will do the opposite - in fact, software and electronics makers are expected to report an 8.7% plunge in Q1 profit, which would mark the worst income decline since 2009.
http://www.zerohedge.com/news/2019-04-07/wall-street-puzzled-tech-stock-mystery?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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