A Microsoft sign is seen at the company’s headquarters in Seattle, Washington on March 19, 2023. (Photo by I RYU/VCG via Getty Images)
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The slide in shares stopped
US stocks fell on Friday, with the S&P 500 and Nasdaq Composite ending their six-day winning streak. In contrast, the pan-European Stoxx 600 closed 0.53% higher. Separately, the 2-year UK government bond yield rose to a 15-year high of 4.933% after UK economic data came in hotter than expected.
Tesla’s self-driving ambitions
Elon Musk said Tesla’s value depends on whether it can crack the code for self-driving vehicles. In other words, Musk expects Tesla stock to skyrocket once the electric-vehicle maker perfects autonomous driving technology, which in turn will allow Tesla owners to convert their cars into robotic taxis.
Amazon cancels future presentation
Amazon has canceled its re:MARS conference this year, which showcased developments in futuristic technologies. At last year’s conference, Amazon introduced its voice assistant Alexa, posing as a deceased relative. There is no word – dead or alive – whether the event will be resurrected in the future.
Blink in China
US Secretary of State Antony Blinken met with Chinese Foreign Minister Qin Gang in Beijing yesterday. Blinken is the highest-ranking American official to visit China during the Biden administration. His trip was originally scheduled for February but was postponed after an alleged Chinese spy balloon flew over the United States
[PRO] Bull now, bear later
“Bears like us were wrong,” Michael Hartnett, Bank of America’s chief investment strategist, admitted in a note. According to Hartnett, there are three factors that will allow stocks to continue their current rally — although he fears it will be a “big rally before a big collapse.”
Major US indices closed lower on Friday: the S&P lost 0.37%, the Dow Jones Industrial Average slipped 0.32% and the Nasdaq fell 0.68%. Still, both the S&P and Nasdaq have hit their highest levels since April 2022, a testament to the current strength of the rally.
Investors have artificial intelligence to thank for these impressive figures. Microsoft, which integrated AI into its products earlier than most of its peers, hit an all-time high of $342.33 per share on Friday after rising more than 43% this year.
That’s reminiscent of the 1990s, when the tech giant’s stock shot up a paltry 9,562% over the decade(!). But this comparison met with an unwelcome response. Of course, that was right before the dot-com bubble burst. In October 2000, Microsoft stock was worth less than it was in January 1998.
Well, I’m not suggesting that the current AI-led rally is fragile. But there are some worrying signs. CNBC’s Scott Schnipper notes, “It’s not better economic news or a buoyant earnings outlook that’s driving stocks higher. It’s the momentum and the fear of missing out on more gains.”
Still, it looks like the momentum is holding. There’s nothing on the horizon that looks like a “bull trap,” said Sam Stovall, chief investment strategist at CFRA Research, meaning markets are likely to keep going higher for now.
However, some analysts, such as BofA’s Hartnett and Savita Subramanian, the bank’s lead quantitative strategist, believe the S&P will fall from current levels by the end of the year. The market bulls could still stumble across the stock market and exit, pursued by metaphorical bears.