The last 15 years have been a magical time for the stock market
Don’t get too complacent.
First of all, much of the S&P’s growth is being driven by the so-called “Magnificent Seven” technology stocks.
Periods of extraordinary innovation are inherently unpredictable.
No one really knows how exactly AI will transform the economy, and while it could justify the market’s positive growth outlook, there will be a lot of creative destruction along the way.
Allison Schrager Bloomberg 13 June 2024
S&P 500’s recent returns rest on a precarious base.
The Federal Reserve has disappointed investors this year, but no matter. The markets have adjusted.
Even without any interest rate cuts so far in 2024 — and with the likelihood of just one meager rate reduction by the end of the year — the stock market has been purring along.
That’s quite an achievement, given the expectation in January that the Fed would trim rates six or seven times in 2024
A.I. fever — based on the belief that artificial intelligence is ushering in a new technological age... In fact, strip away the biggest companies, especially the tech companies, and overall market performance is unimpressive.
The standard cap-weighted S&P 500 has risen almost 14 percent this year... The equal-weighted S&P 500 has gained only about 4 percent this year.
Similarly, the Dow Jones industrial average, which isn’t cap-weighted is up only about 3 percent.
Jeff Sommer New York Times 14 June 2024
https://www.nytimes.com/2024/06/14/business/stock-market-interest-rates-fed-ai.html
Our holiday from history has come to an end.
The zero-interest-rate environment so many people expected would last forever.
https://englundmacro.blogspot.com/2024/05/higher-for-longer-rates-could-be-higher.html
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