Posted November 13, 2023
By Ray Blanco
The State Of The Market: 2023 And Beyond
With the holidays quickly approaching, that means that 2023 is drawing to close.
We’ve seen some big developments in tech, mostly in the realm of artificial intelligence, but also in revolutionary fields like quantum computing, alternative energy, and biotech.
This year seems to have been a good one in the markets, with the S&P currently up over 15% year-to-date.
But this positive outlook starts to fall apart once you look under the hood…
The S&P is weighted by market cap, so the overall success in 2023 of mega-cap companies like Microsoft (NASDAQ: MSFT), Apple (NASDAQ: AAPL), and Nvidia (NASDAQ: NVDA) counts for a lot more than the struggles of smaller companies.
This shows in the S&P 500 Equal Weight Index, which as you would guess counts all companies listed on the S&P equally (regardless of market cap) is actually down on the year.
That reveals that 2023 has been a year of the Haves & the Have Nots, which does not bode well for tech investors that are on the hunt for breakouts from smaller companies.
But there is a huge silver lining to this cold market.
Many smaller tech companies are trading for less than cash.
The XBI biotech index is sitting near its five year lows, despite lots of good news coming out of that sector.
Lots of insiders and institutional investors are filling up their carts on these dirt cheap stocks with huge breakout potential.
With the Fed pausing their rate hikes, it should be a lot easier for smaller companies to start raising cash and finally keep pace with the giants in the tech market.
Another deceptively warm market within tech is semiconductors. The success of Nvidia and Advanced Micro Devices (NASDAQ: AMD) may have fooled some to think that the chip market has bounced back since its very low lows over the last few years.
But chip companies that aren’t riding the AI wave with powerful hardware designed for data centers are still suffering from the low demand for consumer devices.
The COVID-era shift to working from home (and just plain being home) led to many people replacing their old devices. Which means that they haven’t been in the market for new devices since…
Demand for new devices may not normalize in the next 12 months, but it does appear that we have seen it bottom out and that it is already on the road to recovery.
I see tech finishing out 2023 strong with even bigger things in store for it in 2024, and beyond.
With that, here are the top stories I’m lookin at this week…
First Planned Small Nuclear Reactor Plant In The US Has Been Canceled
Duke Scientists Create Brain Implant That May Enable Communication From Thoughts Alone
Canon's Nanoimprint Litho Tool Could Disrupt Wafer Fab Equipment Market
AI’s Power-Guzzling Habits Drive Search for Alternative Energy Sources
Sam Altman Says What OpenAI’s Secretly Working On Will Make Today’s AI Seem "Quaint"