By now everyone knows it: what is going on with a handful of tech stocks is remarkably similar to the irrationally exuberant events from the first tech bubble at the turn of the century.
Four weeks ago, Goldman pointed out that in 2017, just 10 companies are responsible for half of the entire S&P's rally YTD with the top five, AAPL, FB, AMZN, GOOGL, and MSFT – have accounted for nearly 40% of returns.
Tuesday's session started off on the back foot, with the Euro first sliding on Draghi's dovish comments before Europarliament on Monday where he signaled no imminent change to ECB’s forward guidance coupled with a Bild report late on Monday according to which Greece was prepared to forego its next debt payment if not relief is offered by creditors, pushing European stocks lower as much as -0.6%. However the initial weakness reversed after Greece's Tzanakopoulos denied the Bild report, sending the Euro and European bank stocks higher from session lows.
"Smells Like Victory" - Happy Memorial Weekend...
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S&P at record highs as US macro data topples to 15-month lows...
While stocks continue rising to all time highs on the back of a handful of tech stocks, the tension below the bond market grow, only not in the direction that an all time high in the S&P would suggest. As RBC macro strategist Mark Orsley writes in a Friday note, "I am finding it increasingly difficult to see a near term catalyst for UST’s to sell off. In fact, almost all indicators I watch are flashing a warning that a breakdown in yields (longer end) is increasingly probable" and urges readers to "position/protect for a move to 2.00%."
S&P futures were fractionally lower from yesterday's record high as European stocks declined and Asian stocks were mixed, pressured by yesterday's 5% plunge in crude after OPEC unexpectedly "failed to surprise" markets, and announced the bare minimum supply cut extension that was expected by oil traders, who in turn puked long positions.