Interesting stat that Nvidia’s fall in value yesterday was greater than the total value of Chevron!
Defo. a bit of a reset in how value is defined and appreciated going on at the moment. No panic, just a bit of common sense in first post Labor Day trading with some more brisk housekeeping going on over the next few days.
From where?
From monies held back in other assets that have been awaiting changes in the interest rate cycle and the direction of US election result.
For instance, I can get 5% interest risk free just now. Why buy fixed income then? That’s about to go in a different direction in coming days, weeks and months. 12 months from now will likely look very different after all those money market funds which have held huge sums for the last couple of years get raided.
In addition the interest rate cycle change triggers a whole heap of new corporate debt issues, monies which will be used to pay down previous higher cost borrowings and/or invest in business growth, both of which should lead to higher profitability, which equals greater demand in a normal world.
Will be interesting to see what rate cut fed adopt later this month. 50bps may generate some market angst I think
I dunno, I can’t help but think that the angst is misplaced and that any situation that is less than unbelievably perfect and Goldilocks like is seen as really bad news compared to just a few years ago where nuance and context was more important than it seems to be now.
I’ve read a few articles recently about why things are more volatile than pre-covid and there seems to be a number of reasons but long and short of it, it just is.
I think much of it also comes down to perspective.
There are so many opinions out there because there is so much much money to be made out of being a market commentator these days, especially those who promote endless doom via click bait that methinks many worry too much. Big P/E’s are nothing new; a weakening Dollar, meh; Fomo and herding instincts are perennial; Angst? Tell me a time when there wasn’t any.
The facts remain that we’re going into an interest rate reduction cycle with a new US Presidency, either of these is historically a good medium to long term signal. Both taken together are not really bad news and all the other stuff floating around, no matter how initially important they might seem (and thereby disruptive in the shorter term), become background noise pretty quickly. Unless perhaps one is wholly or significantly invested in a US or Global tracker with a third of your money invested in those few stocks that have seen mega growth for a couple of years but are now seeing profit takes…
Agree with all your points. My view is nobody knows (just take a look at end of year estimates from the ‘top’ analysts and the massive breadth).
Time in market, not timing market. However, some bargains to be had if you’re willing to catch a falling knife
Aaaand…We’re off…The FTSE takes an early lead and is closely followed by the U.S. futures market but now Germany and even the basket case that is France are pulling away and leading by a short head until the opening in the U.S. sees the Dow pulling away by a length but now the Nasdaq squeezes into the lead a little bit more from the S&P only for the Russell to take up the running shortly to be beaten back into third with the Nasdaq returning to the front of the field powered on by it’s standard performance enhancers NVIDIA, ASML, Apple, META, Microsoft and Alphabet closely followed by the Little Italy wonder of the last few years that is Ferrari stock…Whoooosh