State of the Market

[coolhandluke]

That chart has a Farage-esque level of fable about it.
It starts in 2020, but your comments talk about “pre Covid levels”

Do you think we are all as gullible as you? It’s like you’ve taken the worst of Scooter and combined it with the far-right to make false assertions.

Whilst IT companies in the USA have been laying people off, most have been in tulip roles such as HR & Diversity etc. From what I saw they didn't make a large number of development staff redundant.

[SchumiStars]

Looks like another dead week for job applications. Going cycling.

FFS, it's been 12mths. How can it be so tulip.

[Bluenose]

French, UK and US election uncertainty not helping.

German elections next year too.

Portuguese finished in March and Netherlands did not have a fully functioning government until today.

[dsc]

Bench time here I come...was told I'm not getting extended due to re-org and cost cutting. Mental as there's heaps of work coming and the current team is already stretched. No worries though as they have a few scrum masters so I'm sure they will manage...fecking bean counters. Anyways, at least timing is good for a holiday.

[sreed]

My client (mid sized FS firm) is at the early stages of (yet another) reorg triggered by the firing/resignation of their c-suite Tech guy.

Apparently their parent co has given them a payroll reduction target and (at least according to my manager) the new king of the hill is considering using more contractors instead of perm hires. To balance that out he also said that the consultants they've appointed have reported that their salary scales and rates in the delivery teams are 'too high', whatever that means.

They've been trying to get rid of day-rate contractors (I'm now on a PAYE FTC until Christmas) outside super specialist short-term roles so it'll be interesting to see how this pans out...

[agentzero]

That chart has a Farage-esque level of fable about it.
It starts in 2020, but your comments talk about “pre Covid levels”

Do you think we are all as gullible as you? It’s like you’ve taken the worst of Scooter and combined it with the far-right to make false assertions.

https://fred.stlouisfed.org/series/IHLIDXUSTPSOFTDEVE

The website won't allow data prior to Feb 1st 2020.

[edison]

French, UK and US election uncertainty not helping.

German elections next year too.

Portuguese finished in March and Netherlands did not have a fully functioning government until today.

Doesn't seem much uncertainty about the UK election. Labour to win big, just a question of how big.

[willendure]

Here is another technical indicator that suggests a major correction is coming - it advance singalled very well the dotcom crash for example. This is the Dow Jones Transport average versus the S&P500. You can see they are strongly correlated, but have now diverged. The transport average tells us what is happening in the real economy and indicates when the S&P500 has diverged into fantasy land.



For comparison, here is the divergence that happened ahead of the dotcom crash:



There was no such advance signal for the 2008 crash, but there are earlier examples for crashes in the 70s and 80s.

[Fraidycat]

Here is another technical indicator that suggests a major correction is coming - it advance singalled very well the dotcom crash for example. This is the Dow Jones Transport average versus the S&P500.

One thing about the stock market is its hard to predict when the next crash will happen.

Probably better to post after the crash has started, eg when the FTSE 100 and S&P 500 are down more than 10% from highs or at least below the 200 day moving average. Rather that post charts that try to predict an imminent stock market crash while the market is at all time highs.

Its only been two years since the last bear market for stocks. Outside of some big names, the market hasn't even fully recovered from the last bear market.

[edison]

Here is another technical indicator that suggests a major correction is coming - it advance singalled very well the dotcom crash for example. This is the Dow Jones Transport average versus the S&P500. You can see they are strongly correlated, but have now diverged. The transport average tells us what is happening in the real economy and indicates when the S&P500 has diverged into fantasy land.



For comparison, here is the divergence that happened ahead of the dotcom crash:



There was no such advance signal for the 2008 crash, but there are earlier examples for crashes in the 70s and 80s.

The S&P is very heavily weighted towards tech stocks now, mainly the so called Magnificent Seven, a few chip firms and the largest SaaS firms. The top 25 stocks by size account for nearly 50% of the total index and tech makes up over 40% of that. And I believe that it would be more but there is a maximum weighting factor for single stocks otherwise Microsoft, Apple and NVIDIA would be close to 10% on their own rather than 6-7%.

Ever since I started my own SIPP about 12 years ago, I've gone long on tech stocks as a long term buy and hold investor. But I'm getting nervous now as my overall tech exposure is reaching 55-60% across my whole portfolio so I will be starting to trim this soon.

There is a mania but it is different in some ways to the dot come boom because these tech companies are making huge profits. It's just the PE ratio for stocks is priced for near perfection.