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“There is short-term optimism, almost like a last hurricane … before rates rise and any concern around Big Tech with a democratic government slows down.”
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This is Gene Goldman, chief investment officer at Cetera Financial Group, who is speaking to Bloomberg News about an increase in technology purchases through hedge funds ahead of Apple AAPL’s profile gains
and Amazon AMZN,
in the following days.
According to Goldman Sachs Group’s first brokerage, hedge funds have increased their net exposure to megacaps in the technology sector at one of the fastest rates in recent years. It came out of a stretch in which “smart money” unloaded some of the most prominent names.
After staying strong in the face of the pandemic, Facebook FB,
Apple, Amazon, Microsoft MSFT,
and GOOG Alphabet,
everyone is expected to grow faster than the rest of the market for the 12th consecutive quarter, Bloomberg reports.
If NFLX Netflix,
looking at last week’s results is any indication that such a “last hatred” could be profitable for those loading up on technology stocks. Netflix rose 17% to a strong number.
Read: The “biggest red flag” on this bull market has just disappeared, says the trader
Aside from Megacap technology, it’s a huge week for earnings, with almost a quarter of the S&P 500 set to report results. Combined, the reporting companies represent 39% of the index by market value. Given that the S&P 500 is weighted by market capitalization, this list of companies will have an oversized impact on the profit trajectory for the index.
It is also a crowded stretch for DJIA Dow Jones Industrial Average,
with 13 members of the blue-chip index preparing to report their quarterly results, including 3M MMM,
, Johnson & Johnson JNJ,
and American Express AXP,