Tech Stocks Led The Market Rally. Now They’re Falling Behind
I’ve been seeing a lot of headlines like the one above recently as value stocks have crushed growth stocks YTD. Of course, yesterday and so far today, growth stocks are crushing value. Even Treasuries are coming back, so what gives? Remember, there are two forces at work all the time in markets: intermediate and long-term trends and short-term counter trends. In the short-term, markets move too far too fast and have to eventually snap back to some sort of equilibrium. That’s probably what’s been happening to growth stocks the past two days. I’m not saying that value will turn around and re-assert dominance. For that to happen the economy has to continue to move on a path towards re-opening. We still continue to see worrisome Covid news. At the same time, volatility has collapsed. It always makes me a bit concerned when there are things to be scared about but nobody is scared.
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