Tech Turbulence: Valuation Risks Amid Paradigm Shifts
This week I covered the following topics/ideas:
1. Policy Pulse: Anticipate global growth reacceleration and inflation resurgence leading central banks to pause rate cuts, and maybe unpivot (back to rate hikes) in some cases.
2. Tech Turbulence: The risk case for tech stocks is that extreme high investor confidence and stretched valuations get disrupted by the same kind of paradigm shift that triggered the AI bull run in the first place. $Invesco QQQ(QQQ)$ $NASDAQ 100(NDX)$
3. China vs USA: The 2025 surprise of Chinese stocks outperforming US stocks has received a boost from a surprising source; leaving a set of unknowns and exposing some key risks for investors. $.SPX(.SPX)$ $.IXIC(.IXIC)$ $.DJI(.DJI)$
4. Stocks vs Bonds: The forward-looking equity risk premium is set to be negative, and stocks are extremely expensive vs bonds; however, it is still a matter of timing (macro/technicals not yet aligned).
5. Gold Miners: Bullish miners as gold breaks out to new highs, cheap relative value, investor pessimism (contrarian bullish), and due to their defensive/diversifier value.
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