tybs
Asia online.
Little breakout action in Gold. Everything else pretty tame.
Wall Street Puzzled By Tech Stock Mystery
Ever since tumbling into a bear market in the fourth quarter of 2018, the Nasdaq has exploded higher, surging more than 30% since Christmas, trading just shy of all time highs and nobody on Wall Street can explain why…
… because as Bloomberg puts it, aside from the stock price itself, "everywhere else you look in the industry, bad news is overwhelming the good."
Here's why Wall Street is puzzled: even as tech stocks soar, with the Nasdaq up 5 of the last 6 trading sessions, tech profits are shrinking "at an alarming pace", valuations are reflating and politicians want to break the companies up. Worse, as we reported last week, Samsung previewed a dismal quarter for semiconductor orders which have collapsed, while spending on infrastructure to support the all-important "cloud" is off. And yet, as Bloomberg puts it, "the addiction won’t break."
Of course, it is hardly news to anyone that fundamentals no longer matter in a market where central banks have greenlighted a scramble into the riskiest of growth stocks, and where too much money has been lost by sitting out, and where as Morgan Stanley chief equity strategist Mike Wilson warned that groupthink - and FOMO- has taking over; it is this FOMO that while creating furious rallies, also precedes a cycle’s peak.
“I can’t remember a time in my career when institutional investors have been so preoccupied with what everyone else is doing,” Wilson said, who for the second time in the past year is advising investors to avoid tech stocks. "When investors are more focused on what everyone else is doing, rather than what the fundamentals are doing, it’s probably the end of a trend."
(see cap #4 for the dip in december and the rise that began the day after Apple warned on Guidance for the 4th qtr report)
And yet, as Bloomberg points out, "if this is the end, it’s been a tough one to miss". Consider the following:
*the Nasdaq 100 just rose for the 14th time in 15 weeks and is about one big day away from its August record
*Fourteen companies, among them chip standard-bearer Advanced Micro Devices Inc. and Lam Research Corp., are up more than 50 percent from their Christmas lows,
*only seven stocks in the gauge are down over the stretch.
Instead of stopping investors, investors are rushing back to an industry that was the market’s favorite as recently as last summer. At 4.4x sales according to Bloomberg, tech stocks trade at a multiple that is twice as high as the rest of the market. That’s close to the highest premium since 2000.
One reason for the relentless pursuit of tech names: the continued slowdown of the global economy, coupled with a Pavlovian response from global investors. After all, for 15 straight quarters through last June, tech profits outpaced the S&P 500, with the growth gap averaging 6.3% points; that outperformance, however, is ending, if only for the next quarter.
"Everybody is trying to find growth at all costs and there’s not a plethora of options," said Mark Lehmann, president of JMP Securities. "People are willing to pay more."
(whoever these 'people' are they are insane-love the surname and where he works too
https://www.zerohedge.com/news/2019-04-07/wall-street-puzzled-tech-stock-mystery
Chinese mkts most likely reacting to this
China to step up bank reserve ratio cuts to help small firms
BEIJING/SINGAPORE (Reuters) - China will step up its policy of targeted cuts to banks’ required reserve ratios to encourage financing for small and medium-sized businesses that play a key role in economic growth.
Beijing has been urging banks to continue lending to struggling businesses, especially smaller private concerns that account for more than half the country’s economic growth and most of its jobs.
https://www.reuters.com/article/us-china-economy-idUSKCN1RJ0D4
https://www.kitco.com/charts/livegold.html
https://www.dailyfx.com/crude-oil
Multiple Chinese Boeing 787s Grounded After GPS Rollover Glitch
On Friday we reported that this weekend, on April 6th, the world was facing another mini "Y2K" event, this time on GPS devices, as they roll over from “week 1024” to “week 1.” If you have a Garmin or a TomTom on which you rely for navigating, you could run into trouble.
Ahead of the big day, navigation technology manufacturer TomTom NV told users on its website that there was “no need to worry” if you frequently update your device, but said those who don’t may find “navigation impossible” among other problems. Separately, GDP nav giant Garmin said its testing had shown the “vast majority” of its GPS devices would handle the rollover without issue, and those that were affected would see an incorrect date and time displayed but “the positioning accuracy will not be affected.”
Fast forward to Sunday morning when Bloomberg gloated that "the world as we know it didn’t end." As the newswire noted, "the glitch was only expected to affect older GPS systems or ones that hadn’t been updated. The U.S. Department of Homeland Security did signal it wasn’t expecting wide-scale disruptions, but it still warned that utilities, financial systems, airlines and telecommunication systems could be affected by the problem."
Yet while there was indeed no widespread aftershock, some "not so old" systems were indeed affected, with China Aviation Review noting that, surprise, "multiple Boeing 787s in China experienced GPS 20 years rollover issue."
Multiple Boeing 787s in China experienced GPS 20 years rollover issue. Some aircrafts have to be grounded waiting for an update. pic.twitter.com/IEFF2GHIt2
— ChinaAviationReview (@ChinaAvReview) April 7, 2019
And with no less than 15 Dreamliners affected by the rollover glitch, some aircraft have to be grounded waiting for an update. Despite the GSP snafu, there were no immediate reports of any incidents or complications due to the bug.
With China taking on an aggressive stance vis-a-vis Boeing ever since the latest 737 MAX crash, when in the aftermath of the deadly Ethiopian Airlines catastrophe, China was the first major nation to ground its fleet of the Boeing workhorse airplane, only to see the FAA backtrack and follow suit in the coming days, it is unclear how quickly China will grant the 787 a green light to resume flight as the embarrassments for the biggest Dow Jones company continue to pile up.
https://www.zerohedge.com/news/2019-04-07/multiple-chinese-boeing-787s-grounded-after-gps-rollover-glitch
https://twitter.com/ChinaAvReview
can see what you are on about.
it was directed at this board as in to say he tried to pass himself off as a co-creator and "had" the chatlogs.