Stocks in longest run of monthly gains
london — A dive in high-flying US tech stocks on worries their boom may have peaked left investors wondering on Thursday whether the longest global equity bull run in living memory might be starting to splutter.
The caution was sparked by an overnight Wall St wobble involving a rotation from tech to financials and came just as the near 9-year global rally notched up another impressive milestone.
The world’s broadest equity gauge — the MSCI all-country index — was on course to finish November with its 13th straight monthly gain — the longest such winning streak in the index’s 30year history. Lucky for some.
Though the celebrations were muffled slightly by the tech problems - China stocks had also taken another tumble in Asian trading the mood seemed to be improving again in Europe.
Germany’s Dax and France’s CAC 40 both inched up for a third day, though London’s FTSE was back in the red as hopes of a breakthrough in Brexit negotiations pushed the pound higher again.
“I’m not sure one would say it’s a bubble (in tech stocks),” said Andrew Milligan, head of investment strategy at Standard Life. “By and large the companies are generating either good profits or the potential for good profit growth”.
But “Tech is a sector unto itself... it’s utterly a view about barriers to entry.” Possibly weighing on tech were concerns, sparked by a Morgan Stanley report earlier this week, that the “super-cycle” in memory chip demand looks likely to peak soon. Shares of Amazon.com, Apple, Google parent Alphabet and Facebook fell between 2 per cent and 4 per cent. Among the year’s other high fliers, Netflix slid 5.5 per cent while Asia’s bellwether Samsung slumped 4.3 per cent to twomonth lows. The Nasdaq index is still up 26.8 per cent so far this year, roughly 7 percentage points above gains in the MSCI world.
The tech nerves were not just confined to stocks. Rocketing cryptocurrency Bitcoin dropped a cool $1,000 to a low of $9,250 before clawing back nearly 3 per cent in Asia and Europe to around $10,100. In the more mainstream FX markets, the US dollar climbed against the yen but dipped against the euro and the pound. Measured against major peers it is headed for biggest monthly drop since July. — Reuters