A whiff of Goldilocks, on cue…
As inflation fades but the economy remains intact.
Amid the Q4-Q1 broad rally projection and specifically due to our view of fading inflation signals and expectations, we have been noting in NFTRH that Tech is likely to “play catch up” (along with a few other segments). In other words, that which was impaired the most by rising yields and the 2022 inflation hysteria would eventually get relative relief as the Fed hawk play matures into old age.
This would be a whiff of the ole’ Goldilocks regime. A whiff, mind you. I don’t think we are going to see the likes of the 2013-2018 experience. She’ll eventually get nabbed with a bowl of ‘just right’ porridge in her hands.
As for the market signaling, the QQQ/SPY ratio is making its move today. Completely on plan.
More particularly, the Cloud segment is leading QQQ to a degree, at least. Cloud/SaaS has been my main Tech vehicle insofar as I’m playing Goldi.
Here is CLOU/SPY for reference. This stuff is richly valued growth. Exactly the stuff that got trampled in 2021 and 2022 and was due to play some catch up amid fading inflation. Go ask Cathie Wood, ha ha ha. I expect this joy to have a shelf life just long enough to suck in enough momos and FOMOs into thinking the bear is over.
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