Market Musings 100324:
Is the Tech boom fading, Are Commodities Overlooked?
Podcast this week:
Know the essentials of trend-following
Pascal Chrobocinski, Senior Hedge Fund Analyst at BNP Paribas Wealth
Management, talks about the trend-following strategy.
- Definition of trend-following.
- Can investors benefit from rising and falling trends in prices?
- How do CTAs make money?
- How do CTA strategies improve portfolio diversification?
Is the Tech Boom Finally Fading: in charts
Not only is the US Tech sector flat over the last month, but Google, Apple and Tesla all continue to lose altitude after a heady 2023.
Source: tradingview.com
The mega-cap tech stocks, exemplified by the FAANG group of stocks, looks overall to be under-performing the average US large-cap and mid-cap stock of late.
This may highlight the start of a rotation within the US stock market away from very narrow leadership from the Magnificent 7, and towards broader participation
by the average US stock, with broader participation from more sectors than just Tech.
Source: tradingview.com
As a result, the US Nasdaq 100 has actually under-performed the Euro STOXX 50 (large-cap Eurozone stocks)
and the Japanese Nikkei 225 over the year to date, with Japan continuing to be the standout performer in
local currency terms, almost +20% for the year so far. .
Source: tradingview.com
Away from Tech, one sector I continue to track closely in Europe is the Insurance sector, which continues
to make new multi-decade highs led by insurance conglomerates such as AXA in France, Generali in Italy
and Aviva in the UK. This sector continues to benefit from strong pricing of insurance policies off the
back of relatively high inflation, while still offering generous dividend yields for income-hungry investors.
Source: tradingview.com
Time to look at unloved Commodities?
According to Bloomberg, commodities remain a very small proportion of the average investment portfolio,
which is dominated today by stocks and bonds.
But I think that commodities are worth another look, led today by gold, which has recently broken out
to a new all-time…
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