Market Musings 090923
Big Tech Finally Blinks?

Are we seeing the start of a potential reversal in Apple, Nvidia?


  • 2023 to date: Stock markets lead, real estate and government bonds lag.

  • Regionally, Japanese stocks lead, UK stocks trail

  • US stock market performance dominated by Big Tech, but are they faltering?

  • Obesity has been a mega-theme in Healthcare

  • European Health care sector looks a quality defensive exposure

  • Commodities: Uranium shows the best momentum

Japanese stocks have been star performers

Which asset classes have led this year to date?

Real Estate has been poor on the back of sharply rising mortgage/loan interest rates, while government bonds have struggled in this high inflation period.

Corporate credit has eked out a modestly positive return over the year so far, but no better than cash (which finally gives a decent return on zero risk).

Commodities have been very mixed, with oil showing good momentum since mid-year but base metals struggling given China worries.

That then leaves global stocks as the best performer with a double-digit return in euros, US dollars and pounds.

At a regional level, Japanese stocks (on a currency-hedged basis) have been standout winners. The US has caught up to Europe over the year to date, thanks to Big Tech leadership on the back of hype over Artificial Intelligence. Finally, UK stocks have lagged given lacklustre domestic economic performance and a lack of exposure to technology.

2023 to date: Japan leads, while UK lags



Hints of a potential change in US stock market leadership

While the US “Magnificent Seven” tech stocks have led the momentum Stateside, there are some hints of a peak in this huge outperformance over the rest of the S&P 500 index in the last few weeks.

US Stocks: FAANG stocks have led, but are they now stuttering?



Just how massive the Tech leadership has been in the US is evident from the relative performance of the S&P 500 ex Tech segment against the Nasdaq 100 index since 2016…

S&P 500 ex Tech has massively underperformed Big Tech since 2016


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