Submitted by QTR's Fringe Finance
As I write this Thursday morning, Dow futures are green while Nasdaq futures are down roughly 0.5%. It’s a small but interesting divergence, and one that supports something I’ve been predicting for a while now: a rotation away from speculative technology and AI-related investments and toward established businesses with more predictable earnings and cash flows.
I continue to believe tech, particularly the more speculative corners of the AI trade, is headed lower over the short to medium term. Yesterday’s rally didn’t change that view. As I discussed yesterday, citing Gordon Johnson, I think much of the move could be attributable to VIX compression and the unwinding of election-related hedges. Once the election uncertainty disappeared, investors no longer needed as much protection, implied volatility fell, and the resulting repositioning helped push stocks higher.
That doesn’t mean there wasn’t genuine buying, or that the market can’t rally further. But I
