Tommy Thornton: Tech Stocks Are In A Bubble
Forward Guidance
Market Crowded with Complacent Investors and Potential Risks Ahead
The market is crowded with investors who are overly complacent and have high expectations, which could lead to potential risks. Retail investors are fully long, sentiment polls are at peak levels, and investors' intelligence is showing a high bullish sentiment. However, the high valuation and low volatility in the market pose a risk, especially with CTAs and vol control funds being fully long and selling volatility. The narrative of rate cuts and potential inflation increase could catch investors off guard, as the market may not necessarily react as expected to Fed rate cuts. The focus is shifting towards earnings moderation, with Wall Street playing a game with high expectations for tech names.
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