While attention was focused on the tech sector, the stock bubble at least got headlines!
The idea that the stock bubble is limited to technology companies is ridiculous, but the fact that the news media acknowledge that much is progress. We have had years of money-printing by the Federal Reserve. A lot of that new money went into the stock market, driving up prices. This effectively means a wealth transfer from middle class people who have 401ks to wealthier traders who get out of the market before the crash.
Market Insider at CNBC reports, “Apple, Facebook and other big tech stocks tank, weigh on Wall Street.”
Big tech was slammed Friday as investors took profits from the group, which some fear has become a massive market bubble.
The sell-off accelerated in afternoon trading, with the Nasdaq falling 2.4 percent, and names like Facebook and Apple, down 4 percent. The S&P tech sector was down 3.3 percent Friday but was still up 18 percent for the year.
Goldman Sachs on Friday released a report on the top five outperforming mega-cap names in tech with some warnings on valuations and concerns that their volatility has become extraordinarily low. In fact, the stocks had become closely correlated to safe haven plays, like bonds and utilities.
I doubt there will be any “safe haven plays” in the future.
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