Is the S&P FANG’d Out? Debt Isn't the Only Ceiling
Bloomberg Opinion
23-05-23 04:23
The S&P 500 index has resisted breaking through the 4,200 point barrier despite flirting with the figure several times, a development which Stockton University's Nathaniel Warner linked to "the markets [being] a game of psychology" and "specific landmarks [being] self-fulfilling" in terms of traders anticipating failure at key levels. Wall Street strategists had been braced to predict a 5% decline by the end of the year after the past 12 months' roiling instability but were taken aback by the coterie of tech giants generating the lion's share of market growth, leaving smaller (usually more vulnerable) companies out in the cold. This situation is leading to qualms among asset allocators, who are remaining cautious even as many increasingly think that the tech stocks are no longer overpriced having enjoyed a several-month-long boom over the past year. Meanwhile, Credit Suisse's equity strategist, Patrick Palfrey, attributed their successful rally to fund managers reversing their decision to underweight the tech firms.