ask Siri whether we are in a technology
bubble and all Apple silky wise digital
assistant can say interesting question
and indeed it is US equity markets
increasingly punchy valuations and rise
a new record high on Thursday have
caused a lot of hand-wringing the strip
out tech and things do look less frothy
the S&P 500 has gained nearly 8 percent
this year that textures have jumped
almost 20 percent sorry about that
and the US equity benchmark is up just
1.4 percent and if we zoom out becomes
clear there is a broad rally in
so-called growth stocks the performance
of sp500 growth shares relative to value
stocks is just one percentage point of
being the greatest sense of calm bubble
in 2000 but technology is the primary
driver especially the fang-tastic 5 the
shares of Facebook Apple Amazon and
Netflix were all gained over 30 percent
this year and Google is up 24 percent
their total market capitalization now
stands at a whopping two point four
trillion dollars and that makes them
bigger than the entire French CAC 40
index or Germany's DAX
nearly as large as in higher footsie 100
the question is whether investors are
getting sucked into the markets biggest
momentum play pushing up valuations to
bubbly levels and there are some
worrying signs of this hedge funds are
tilting heavily towards tech and
Facebook Amazon Google are the biggest
positions in most funds tracked by
goldman sachs and if inflows into tech
focus mutual funds maintain the same
pace then this will be their strongest
year in 15 years according to a Bank of
America and meanwhile city's global
economic surprise index which measures
how often data comes out better or worse
than expected has slumped to the low
since November and that should give
investors were piled into equities
samples for thoughts nonetheless there's
probably too soon to call time on the
tech power to rally while the Nasdaq
Internet index is trading at 34 times
its forward-looking earnings the bigger
ISM p500 tech age
if trading at a more reasonable 18 times
and there is little on the horizon to
dent the growth of the fangs but at some
point the momentum will reverse but
bammel said in a recent note there are
nascent signs we're in the very early
stages of an overshoot