Tuesday is looking dicey for stocks, notably the technology space, as inflation jitters continue to ripple across markets. The sector has been bearing the brunt of concerns that higher inflation may prompt an early end to the Federal Reserve’s COVID-19 pandemic-driven accommodative stance.
“Arguably, the ONLY reason stimulus has even been possible is because there has been no inflation. If inflation comes back, all of the safeguards investors have been given will be dissolved and won’t be able to come back to save the day,” Kee told MarketWatch on Monday in an interview via LinkedIn. He said recent jobs data indeed suggest price rises will be “more serious than previously thought.”
“The declines can be much worse than 25% and if the FOMC [Federal Open Market Committee] is handcuffed because of inflation, the swift bounce back that investors have been used to will not happen either,” said Kee. “The fair value multiple on the SPX SPX, +1.49% is not 30 – [to] 35x. It’s more like 15x.”
He advised investors continue rotating between the SPRD S&P 500 ETF trust SPY, +1.54% and cash. Kee suggested last year staying that course until signs of reversals or that investors were getting worried about central bank stimulus stopping. No signs so far, he said. Stocks are careening lower at the start, led by the Nasdaq Composite COMP, +2.32%, which slid 2.6% to start the week. The Stoxx Europe 600 is down 2%, while in Asia the Nikkei NIK, +2.32% slid 3% and Taiwan’s Y9999, +1.00% main index fell nearly 4%.
Wynn Resorts WYNN, +3.47% will spin off its online gambling unit via a merger with a special-purpose acquisition company.
I just moved to your city, who wouldn't mind showing me interesting places?