Famous market strategist says Dot-Com Bubble warns our stocks at “serious risk” as technical analysts are optimistic about the start of attack
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Albert Edwards warned that analysts’ optimism about U.S. technology stocks could cause trouble.
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Historically, the optimism of acid analysts has led to poor stock market performance.
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He said the capitalization of technology reserves now exceeds the level of the Internet bubble, leaving the market vulnerable.
Social heritage strategist Albert Edwards has long suspected that U.S. AI stocks can live up to the hype around them. Now, it seems that stock analysts covering the technology are starting to become suspicious.
In the client notes released Thursday, Edwards, who is often idly, posted a series of charts that he believes should give investors a pause as stocks maintain close highs. They show analysts’ optimism about tech stocks that support the impressive rally in the market – a development that puts stocks “at serious risks,” he said.
Here are some of them. First is the 12-month moving average of the analyst percentage of EPS forecasts. It has dropped from about 58% to 50% since the beginning of 2024, but the Nasdaq 100 has continued its surge. Historically, this optimistic downward trend coincides with a drop below the 200-day moving average of the Nasdaq.
“If analysts’ optimism about the Nasdaq 100 drops rapidly, the trend will be fast,” Edwards wrote. “Indeed, the index is still in trades above 200 MAV, not to mention recording highs is a A small macro miracle.”
There is also a disconnect between analysts’ expectations for revenue and the actual lagging revenue performance. Now, as the backward income flattened, expectations began to turn southward.
The S&P Comprehensive 1500 estimate has begun to drop down for the first time since Chatgpt-driven rebounds.
“This is the chart below, and investors should be really nervous,” Edwards wrote. “Although analysts’ optimism about the S&P 500 has been a series of optimism,” he said. Lower highs and lower lows. Now rejected the 6-month and 12-month moving averages.”
Edwards once again stressed that the problem with sour expectations is that the prospects for investors are already at extreme extremes, and anything without these extremes is a disadvantage.
“In normal times, this doesn’t pose a serious threat to stock investors, but it can be a big risk when we are in a high valuation and optimism with nose breeding.”
This is a bubble that explores the technology field and the U.S. stock market. Now, tech stocks account for a higher percentage of the market than the internet bubble (Edwards is known for its appeal), and U.S. stocks now account for 75% of global market capitalization.
