Chip and hardware companies like Super Micro Computer and Micron Technology benefiting from tech momentum trade
Despite inflation and interest rate concerns, tech stocks outperforming other sectors
Meta (Facebook) up 20% and Alphabet (Google) up 15%
Microsoft up 14% year-to-date and Apple up 17%
Nvidia, Microsoft, Apple, Meta (Facebook), Alphabet (Google) leading gains
Nvidia share price tripled in last year with market value above $3 trillion
S&P 500 reaching new records due to tech momentum trade
Tech sector driving stock market higher
The tech sector continues to drive the stock market higher, with some of the biggest gains coming from companies like Nvidia, Microsoft, Apple, Meta (Facebook), Alphabet (Google), and others. Despite concerns about inflation and interest rates from the Federal Reserve, these tech stocks have outperformed other sectors and have helped push indices like the S&P 500 to new records. According to experts like Jeremy Siegel of Wharton, the momentum trade in tech stocks is likely to continue for some time.
One of the standout performers in this group is Nvidia, which has seen its share price triple over the last year and now boasts a market value above $3 trillion. Other tech companies like Microsoft and Apple have also had impressive stock performances, with Microsoft up 14% year-to-date and Apple up 17%. Meta (Facebook) and Alphabet (Google) have also seen strong gains, with Meta up 20% and Alphabet up 15%. Chip and hardware companies like Super Micro Computer and Micron Technology have also benefited from the tech momentum trade.
Despite these impressive gains, some investors are starting to see cracks in the tech sector. Net buys have outnumbered sells, but larger accounts have been trimming positions, particularly in the so-called
Apple's 'Apple Intelligence' showcase at its Worldwide Developers Conference (WWDC) drove markets to record highs this week.
Net buys outnumbered sells but larger accounts trimmed positions, particularly in the tech sector’s ‘Magnificent Seven.’
Dispersion is occurring within the tech sector as well as other sectors like discretionary, communications, and financials.
Millennials showed interest in buying discretionary and health care stocks.
Accuracy
The Federal Reserve is expected to cut interest rates potentially in September or December according to market participants.
Softening data on employment and inflation may push forward the expectation for rate cuts.
The timing of rate cuts could put the Fed within the ballpark of when the election is taking place, potentially influencing investor sentiment.
Deception
(70%)
The article contains some selective reporting and editorializing. The author mentions that 'tech has been a significant driver for markets this week' and 'we have certainly seen this renewed excitement surrounding a handful of tech names this week which has really driven the broader markets to record highs.' However, the author fails to mention that there were other sectors driving the market as well. This is an example of selective reporting. Additionally, when discussing investor trends, the author states 'we released our May report. Well, we saw that even though there was a slight uptick in the net buys over sells, there was a bit of a churn underneath the surface when it came to the dollar amount.' The author then goes on to mention specific tech stocks that have seen trimming of positions. This implies that these are the only stocks experiencing such activity and is an example of editorializing. However, it is mentioned later in the article that there has been selling in discretionary, communications, and financials as well.
tech has been a significant driver for markets this week
we have certainly seen this renewed excitement surrounding a handful of tech names this week which has really driven the broader markets to record highs.
The S&P 500 has been buoyant mainly because of A.I. fever.
Nvidia’s share price has tripled over the last year and its total market value is above $3 trillion.
Other tech companies like Meta and Alphabet, as well as chip and hardware companies like Super Micro Computer and Micron Technology, have also had superlative stock performances lately.
Accuracy
Nvidia's share price has tripled over the last year and its total market value is above $3 trillion.
Jeremy Siegel believes the tech momentum trade driving market gains will continue.
Deception
(70%)
The article by Jeff Sommer contains selective reporting and emotional manipulation. The author focuses on the performance of specific tech companies, particularly Nvidia, in the context of Artificial Intelligence (A.I.) fever to explain the stock market's rise without any Fed rate cuts. This creates a misleading impression that A.I.-related stocks are single-handedly driving the market upwards when in reality, it is only a small part of it.
One stock in particular has led the market upward: Nvidia, which makes the chips and other associated infrastructure behind the talking, image-generating, software-writing A.I. apps that have captured the popular imagination.
The S&P 500's recent returns rest on a precarious base. But the rest of the market has been rather ho-hum.
