The Technology Currency
The handful of megacap technology equities are in a class of their own. The 12% rise in Tesla on Monday was one of the single largest market cap gains in any stock, ever. It's now larger than all other car companies combined. Apple, Facebook, Microsoft, Google and Amazon are in a similar class.
What they all have in common is that they're American and act like magnets for capital, particularly when they began to run. We've talked about it before but an underrated factor driving US dollar gains is financial flows into equities and derivatives. The stock market casino operates primarily in US dollars.
The Nasdaq is now less than 2% away from breaking the August record highs and we're nearing the positive Nov-Dec seasonal period. It's tough for the dollar to make gains against commodity currencies and EM in a growth-positive environment but it can continues to make gains against the euro and yen.The rally in tech also points to the steadily improving mood. That's something that both reflects and will feedback into the real economy. Look for improving US consumer confidence on Tuesday.
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