Tech Outperforming S&P By A LOT

No question: QQQ has done very well this year, as the AI-powered enthusiasm has benefitted the largest (NVDA, MSFT especially). However, we are now here.

Does this mean it cannot go higher? It doesn’t mean that at all. Overdone? Perhaps, but perhaps not. The arguments are difficult and you can build a very good case.

  • MSFT AAPL NVDA are priced to perfection

  • Yeah, but, at the margin, the growth and future are here, and they have ample amounts of cash to withstand any banking issues that you you may read about (see next article)

  • With the banking sector turmoil, and the ripple effects of higher interest rates, this sector may be the safe have of the equity market.

Let’s Not Go Overboard

You can see that QQQ and SPY are basically equal to each other, and that over the past 24 months, they are down. What is different from 2 years ago? Interest rates are higher, there will be more on that in the last article of this newsletter.

The idea that stocks are a hedge against inflation? Hmmm.