RUTH SUNDERLAND: Heading for tech trouble?

History tells us that small investors piling into a soaring stock market is a sign of trouble. What should we make, then, of the US markets racing to record highs on the so-called Biden Bounce? 

Markets fell vertiginously in March, when the first lockdowns were imposed but have rallied strongly – and small UK investors have piled in. 

It’s a sign of the times that City firm IG is buying Chicago-based Tastytrade, which allows individuals to trade in options and to dabble in short-selling, in a $1billion deal. To the uninitiated, it may seem odd that share indexes are hitting highs when the world economy is mired in the worst crisis for generations. 

Turning point?:  History tells us that small investors piling into a soaring stock market is a sign of trouble

Turning point?:  History tells us that small investors piling into a soaring stock market is a sign of trouble

Turning point?:  History tells us that small investors piling into a soaring stock market is a sign of trouble

What’s going on? Wall Street, though traditionally a Republican bastion, is mightily relieved at the election of Joe Biden and Kamala Harris. Partly because the huge stimulus and environmental spending they promise should buoy the economy but mainly because they are Not Trump. The hope is they represent the return of sanity. 

There are, however, two bigger drivers: tech stocks, which have flourished in the pandemic, and the levels of government support to Covid-stricken economies. 

Staggering sums are being deployed in the US and UK. In 2008 the UK government spent 1.5 per cent of national income to combat the financial crisis. The figure to battle Covid is 26 per cent. Tech has been bubbling up despite fears that the Silicon Valley giants will be hit by regulation. The so-called FAANGS – Facebook, Apple, Amazon, Netflix and Google parent Alphabet – collectively gained more than $262billion on Biden’s inauguration, taking their market value to $6.15trillion. 

We have seen something similar, albeit smaller scale, in the UK, where companies such as Ocado – a tech business masquerading as a grocer – and recently-listed The Hut Group, an online beauty operation, have seen their shares rocket.

This week Apple will report its results and analysts predict it could hit its first-ever sales of $100bn in a single quarter. Figures from Microsoft and Facebook are also awaited with excitement. 

The tech shares boom is a product of greed and frustration. Sure, people are tempted by gains. But investors are disgusted at the terrible returns in so-called safe deposit accounts and are shunting into riskier assets. That is a major factor behind scandals such as the LCF affair and the rush to invest with Neil Woodford. It is also even more reason for NS&I to be ashamed to have inflicted dreadful service on its depositors for which its boss apologised last week. Not good enough: NS&I should be playing a constructive role in the pandemic, offering national reconstruction bonds with a decent return, so savers could help to finance the recovery from Covid. 

The immense QE money-printing by central banks since the financial crisis has fuelled asset inflation. QE helps depress interest rates, which drives up share and house prices. It isn’t free money. It is effectively being stolen from savers and the asset-poor, including the young. 

The recent rise in Bitcoin is further evidence of a weird world on the markets. Its existence shows loss of faith in conventional central banks, and that is perturbing. 

If US tech falls to earth, it will hurt a lot of people in the UK. Many small investors are exposed through funds such as Scottish Mortgage investment trust, a big holder of Tesla shares. 

Two words for small investors: tread carefully.

#fiveDealsWidget .dealItemTitle#mobile {display:none} #fiveDealsWidget {display:block; float:left; clear:both; max-width:636px; margin:0; padding:0; line-height:120%; font-size:12px} #fiveDealsWidget div, #fiveDealsWidget a {margin:0; padding:0; line-height:120%; text-decoration: none; font-family:Arial, Helvetica ,sans-serif} #fiveDealsWidget .widgetTitleBox {display:block; float:left; width:100%; background-color:#af1e1e; } #fiveDealsWidget .widgetTitle {color:#fff; text-transform: uppercase; font-size:18px; font-weight:bold; margin:6px 10px 4px 10px; } #fiveDealsWidget a.dealItem {float:left; display:block; width:124px; margin-right:4px; margin-top:5px; background-color: #e3e3e3; min-height:200px;} #fiveDealsWidget a.dealItem#last {margin-right:0} #fiveDealsWidget .dealItemTitle {display:block; margin:10px 5px; color:#000; font-weight:bold} #fiveDealsWidget .dealItemImage, #fiveDealsWidget .dealItemImage img {float:left; display:block; margin:0; padding:0} #fiveDealsWidget .dealItemImage {border:1px solid #ccc} #fiveDealsWidget .dealItemImage img {width:100%; height:auto} #fiveDealsWidget .dealItemdesc {float:left; display:block; color:#004db3; font-weight:bold; margin:5px;} #fiveDealsWidget .dealItemRate {float:left; display:block; color:#000; margin:5px} #fiveDealsWidget .footerText a:hover{text-decoration: underline;} #fiveDealsWidget .footerSmall{font-size:10px; padding-top:10px;} @media (max-width: 635px) { #fiveDealsWidget a.dealItem {width:19%; margin-right:1%} #fiveDealsWidget a.dealItem#last {width:20%} } @media (max-width: 560px) { #fiveDealsWidget #desktop {display:none;} #fiveDealsWidget #mobile {display:block!important} #fiveDealsWidget a.dealItem {background-color: #fff; height:auto; min-height:auto} #fiveDealsWidget a.dealItem {border-bottom:1px solid #ececec; margin-bottom:5px; padding-bottom:10px} #fiveDealsWidget a.dealItem#last {border-bottom:0px solid #ececec; margin-bottom:5px; padding-bottom:0px} #fiveDealsWidget a.dealItem, #fiveDealsWidget a.dealItem#last {width:100%} #fiveDealsWidget .dealItemContent, #fiveDealsWidget .dealItemImage {float:left; display:inline-block} #fiveDealsWidget .dealItemImage {width:35%; margin-right:1%} #fiveDealsWidget .dealItemContent {width:63%} #fiveDealsWidget .dealItemTitle {margin: 0px 5px 5px; font-size:16px} #fiveDealsWidget .dealItemContent .dealItemdesc, #fiveDealsWidget .dealItemContent .dealItemRate {clear:both} }

Link hienalouca.com

Advertising:

Tips to Find Low Priced Luxury Holiday Package Deals Fast

For most families, it has already been a common practice to spend the Holiday season in a foreign location. This is caused by the aviation market changes which have given a lot of benefits for people who travel a lot. Airfares going to different tourist destinations are becoming more inexpensive. What does this mean? If there is a perfect time to purchase luxury holiday package deals, now it the right time! Based on the market trend nowadays, you can save both money and time when you go for a luxury holiday. There are countless offers that combine travel and accommodation in one package which is a lot cheaper than getting separate deals. Aside from that, it is also risky to individually book the services that you need for the vacation. You might end up missing out on some important details of the trip. Unlike when you take advantage of luxury holiday package deals, you can be sure that everything is organized meticulously and according to what you really need. Nonetheless, you would still need to carefully select the package that would fit your needs. Review the following tips in getting packages that are reasonably priced. · Normally, luxury tour packages include accommodation, flight travel and transportation to individual tourist destinations. It would be best to choose the complete package so you won’t have to worry about other vacation elements. In addition to that, these are the packages that have the biggest discounts. · You can get big mark down prices, if you will purchase more packages. It is not a bad idea to share the wonderful moment with your loved ones. By doing so, you would not only enjoy, you will also save more money. You can even use your savings for other activities on your vacation. · It would be best to know how much you are willing to pay for the luxury tour packages. You can already work around your budget. You have to stick to your budget. If not, you might end up spending a lot and you will be left with less money for your vacation. · Prices may vary depending on the destination of the tour. You can do a research about places that are attractive yet inexpensive. There are thousands of destinations and you just have to choose wisely. · There are packages that include recreational activities. This means that you are paying for all the activities when you purchase these packages. The right thing to do is to make sure that the activities that are included would be the ones that you really enjoy. There is no sense in paying for activities that will not really make your vacation memorable. If you are going with friends, you should also consider their preferences so that you can be sure that everyone will enjoy the trip. There are other ways on how you can be sure that you are getting the best deal for your luxury holiday vacation. No matter how you choose to do it, you have to get adequate information about the packages. This will help you determine whether it is worth the price.

(Total views: 93 Time, 1 visits per day)

Leave a Reply