Sign up for our daily briefing
Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Denver news in your inbox
Catch up on the most important stories affecting your hometown with Axios Denver
Des Moines news in your inbox
Catch up on the most important stories affecting your hometown with Axios Des Moines
Minneapolis-St. Paul news in your inbox
Catch up on the most important stories affecting your hometown with Axios Twin Cities
Tampa Bay news in your inbox
Catch up on the most important stories affecting your hometown with Axios Tampa Bay
Charlotte news in your inbox
Catch up on the most important stories affecting your hometown with Axios Charlotte
U.S. tech stocks continue rising even as the broader market falls, furthering the divide between the economically driven Dow Jones Industrial Average and the tech-heavy Nasdaq.
Why it matters: As earnings continue to be written down and the Nasdaq's value continues to rise, it has pushed the index to a forward price-to-earnings ratio of 34.2, well above its historical average, according to FactSet.
What's happening: "The Nasdaq 100 has beaten the S&P 500 for seven straight days, five straight weeks, 10 straight months," Bloomberg's Vildana Hajric, Sarah Ponczek and Lu Wang write.
- "While that’s manna for bulls who own market proxies, it is also — at best — a mixed economic signal. As stirring as the rally has been, the whole thing can also be read as proof investors see the pandemic lockdown hanging around."
- "Every time an automated, algorithmic Fang stock rallies, the theory goes, hopes for a speedy recovery in employment and consumer spending take a hit."
Between the lines: The outperformance has investors starting to sound the alarm about a bubble in the market, and particularly in tech stocks, similar to the one that formed before the dot-com crash in 2000.
What we're hearing: The bubbling IPO market in 2020 also is starting to look familiar.
- "You see similar levels of companies with no earnings, so basically speculative investments, coming to the IPO market as we had in 1999–2000," Savita Subramanian, head of U.S. equity and quantitative strategy at Bank of America, said during a recent presentation.
- "This is another warning sign that we’ve seen."