Tech is wounded
The S&P 500 is flat on the day at 3770 after rising as high as 3808 at the open.
The thing is, there are two different drivers of the selling:
- Rising bond yields
- Tech overvaluation
The Nasdaq is down 0.6% and all the high-flying trades are leading the way. The ARKK theme, SPAC theme and green theme are all blowing up. Tesla is now down to $588 from a high of $900 in January in four days of heavy selling.
Some of the close/reopening theme trades are also getting killed as Peloton continues to fall.
The bond market is stable today and it's all tech causing the selling. So many of these companies are tough to value. What's the difference between a 60x multiple and 100x? There's no guardrail there.
Outside of equities though, these themes play out differently. I don't see a tech or SPAC selloff as a problem for the larger economy or the FX market. Sure, some risk aversion feeds through but not in the same way as rising rates.
