Home » Markets » MAGA stocks' coronavirus surge spurs dotcom bubble flashbacks
MAGA stocks' coronavirus surge spurs dotcom bubble flashbacks
Tech stocks will continue to lead markets: Investment strategist
Money Map Press chief investment strategist Shah Gilani, Constellation Research founder Ray Wang and Lee Munson of Portfolio Wealth Advisors provide insight into investing, markets and tech stocks.
Mega-cap tech stocks are surging at a pace that has some investors drawing parallels with the dotcom bubble of 1999 and 2000.
Continue Reading Below
The tech-heavy Nasdaq, led by MAGA stocks Microsoft, Amazon, Google and Apple, has soared 56 percent from its low on March 23 when stay-at-home orders meant to slow the spread of COVID-19 brought the economy to a near standstill and prompted unprecedented government stimulus measures. Its gain in 2020 to date is 51 percent.
“Money wants to flow to companies whose growth prospects are good whether the economy is good or bad,” Scott Wren, senior equity strategist at Wells Fargo Investment Institute, told FOX Business.
SILVER PRICES POISED TO OUTSHINE GOLD
The MAGA stocks currently make up about 21 percent of the S&P 500. They have seen their market capitalization grow by a combined $1.37 trillion this year through Thursday versus a decrease of $3.37 billion for the entire S&P 500, according to Dow Jones Market Data.
Add Facebook into the mix, and the five stocks command just less than 23 percent of the S&P 500. The last time five companies made up that big of a portion of the index was in 1964, according to Jim Bianco, president and macro strategist at Chicago-based Bianco Research, who was the first to make note of the acronym from President Trump's 2016 campaign.
“Typically, when companies get this big, they're not supposed to see these kinds of gains,” Bianco told Fox Business. He attributes them to the companies being “quintessential” stay-at-home stocks, the tendency of retail investors to buy what they use and understand, and the extraordinary stimulus put forth by both Congress and the Federal Reserve.
Bianco, who said there are “some similarities” to the tech bubble, believes investors have a chance to make a lot of money.