913 days ago
Big Tech's stock market leadership is being threatened by rising rates. After a great rally during the pandemic, it seems that the bond market might be the thorn in the side that will slow them down. As a reminder, rising rates means that distance earnings gains become less valuable, making stocks often too expensive in terms of expected reward. Source: Bloomberg
917 days ago
Cathie Wood sold nearly $270 million worth of Tesla shares as the bond sell-off is hitting rate-sensitive stocks. Wood’s Ark Investment Management offloaded more than 340,000 Tesla shares across three exchange-traded funds on Tuesday, according to the firm’s daily trading update. Some 11% of the famous ARK Innovation ETF (ticker ARKK) is still betting on Elon Musk’s company. Source: Bloomberg
918 days ago
Thematic funds have seen $87 billion net flows year-to-date through August 2021, and is thus well on track to surpass the previous record of $107 billion last year. People want to invest in themes and stories. Source: Morgan Stanley
918 days ago
Shares of Peloton Interactive Inc. declined on Tuesday following the news that Amazon is launching Halo Fitness, a service to rival Apple and Peloton. The stock ended the trading session down 4.6%, its lowest level in four months. Source: Bloomberg
918 days ago
If the sell off in technology stock has already been bad, it will likely worsen if U.S. Treasury yields keep rising. This fear helped fuel a 2.9% drop in the Nasdaq stock index on Tuesday. The faster-growing companies are more sensitive to interest rates than others because their stock valuations hinge on revenue and profit that’s not expected to emerge for years. In order to value these stocks, analysts use bond yields to discount future earnings into present dollars. And the higher yields go, the less valuable future profits appear. Source: Bloomberg
