BofA Finally Asks “Is The Tech Bubble Happening Again?”

zerohedge.com / by Tyler Durden / May 22, 2017 2:08 PM

While not nearly in the same ballpark as what is taking place right now with bitcoin, and its various alt-coin peers, the ~30% YTD move higher in tech stocks has been just as impressive, and is beginning to result in warnings of “deja vu” among at least among some bank analysts. One such growing skeptic, is BofA’s Michael Hartnett who writes that US growth stocks have just surpassed the 2000 “bubble” highs vs global value stocks and wonders if “the [next] tech bubble has started.”

Asking rhetorically “Alexa, how high can markets fly?” Hartnett writes that 2017 has seen big global stock (10%) and bond gains (4%), as well as the dramatic resumption of a bullish “deflation” trade. Leadership in stock markets has reverted to the “growth” theme, while leadership in bonds has reverted to the “yield” theme. For example:

• Nasdaq Internet index annualizing a 80% total return
• CCC rated junk bonds annualizing an 18% gain, while EM sovereign bonds (EMGB) annualizing a 17% gain.

Pointing out something we showed one month ago, namely that in a world awash with central bank liquidity “nothing matters”, Hartnett laments that “the lack of tax reform, lack of strong economic growth, no oil recovery, more geopolitical tension, China credit fears, none of it has mattered thanks to the ongoing central bank “Liquidity Supernova”: central banks have purchased a whopping $1.1tn of asset YTD.”

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