Stocks Rocked by Late-Week Swoon in Tech Giants: Markets Wrap

By Investor Empires On Dec 28, 2024

(Bloomberg) — A selloff in the world’s largest technology companies weighed on stocks in the final stretch of a stellar year.

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“أعتقد أن سانتا قد جاء بالفعل. هل شاهدت الأداء هذا العام؟ قال كيني بولكاري في SlateStone Wealth. “إنه يوم الجمعة، والأسبوع المقبل هو أسبوع آخر مختصر للعطلات، وستكون أحجام التداول خفيفة، وستكون التحركات مبالغ فيها. Don’t make any big investment decisions this week.”

وارتفع العائد على سندات الخزانة لأجل 10 سنوات أربع نقاط أساس إلى 4.62%. Bloomberg Dollar Spot Index fluctuates.

Funds linked to several of the key themes that have driven markets and money flows over the past three years stumbled during the week ending December 25, according to data compiled by EPFR.

Redemptions from cryptocurrency funds reached a record high, while technology sector funds extended their longest streak of outflows since the first week of 2023, the company said.

The rise in US stocks this year has pushed expectations for stocks so high that they may become the biggest obstacle to further gains in the new year. بل إن التحدي أعلى بالنسبة لأسهم التكنولوجيا، نظرا لارتفاعها الهائل في عام 2024.

A recent Bloomberg Intelligence analysis found that analysts estimate the sector’s earnings will grow about 30% next year, but technology’s share of the S&P 500’s market cap suggests growth expectations closer to 40% may be built into the stock.

“The market’s largest companies and other related technology companies continue to receive significant bonuses,” said Jason Pride and Michael Reynolds of Glenmede. “Excessive valuations leave room for a downturn if earnings fail to meet expectations. Market concentration should reward efforts to diversify portfolios on a regular basis.

“I remain bullish on the technology sector, despite concerns about high valuations,” said David Miller of Catalyst Funds. “The growth potential, driven in particular by artificial intelligence, justifies these assessments, as it significantly enhances the productivity of companies.”

“Large-cap valuations look expensive, and the U.S. economy is at a late stage. As a result, the road ahead may be shorter than the age of the bull market alone suggests,” said Glenmede’s Pride and Reynolds.

They point out that while the current boom from 2022 to the present seems quite exceptional, it was the second-shortest bull market, with the second-smallest cumulative gains, since 1928. Historically, late-cycle bull markets that had outstanding valuations lasted At the two-year mark, an average of 38 months.

“The combination of a young bull market, late-cycle expansion and premium valuations justifies a risk neutral position given the relatively balanced implications for risk assets,” Glenmede strategists concluded.

For The Sevens Report’s Tom Isay, sentiment is no longer euphoric and markets will start the year with regular investors more balanced in their expectations – which will be “a good thing because it reduces air pocket risk”, but advisers have largely ignored the recent volatility.

“It’s fair to say that this recent decline in stocks has taken the euphoria out of retail investors, but it has not affected advisor sentiment,” he said. “And if we get bad political news or Fed officials signal a ‘pause’ in interest rate cuts, that will likely cause more sharp short-term declines.”

Some key movements in the markets:

Stocks

Currencies

The Bloomberg Dollar Spot Index was little changed

Cryptocurrencies

Bonds

The yield on 10-year German bonds rose seven basis points to 2.40%.
The UK 10-year bond yield rose 6 basis points to 4.63%.

Goods

This story was produced with assistance from Bloomberg Automation.

–With assistance from Robert Brand, Julian Ponthus, and Chiranjeevi Chakraborty.