Investors expecting technology stocks to continue a strong 2023 surge on enthusiasm over artificial intelligence are headed for “trouble” as central banks continue to tighten monetary policy, warned strategists at Bank of America on Friday.
They said that the “best correlation” found in markets over the past 15 years was between central bank liquidity, with an “insane surge” from $5 trillion to $25 trillion, and tech stocks, with the Nasdaq rallying from 2,000 to 16,000. The analyst, in a chart , said “Nouveau bulls” should also beware of a potential “double top” in the weighting for the so-called “magnificent seven” megacap tech stocks — Nvidia Corp. NVDA, -1.94%, Apple Inc. AAPL, +1.32%, Amazon.com Inc. AMZN, +1.14%, Microsoft Corp. MSFT, +1.08%, Alphabet Inc. GOOG, +0.20%, Tesla Inc. TSLA, +3.53% and Meta Platforms Inc. META, -0.25% — in the S&P 500.
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