Thursday, November 14, 2024

The FOMO market is back: Morning Brief

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This is The Takeaway from today’s Morning Brief, which you can sign up to receive in your inbox every morning along with:

The stock market is ripping higher and the memes of people throwing Benjamin Graham’s “Intelligent Investor” in the trash are back all over X.

The Intelligent Investor meme has become a calling card for moments when rallies in certain trades become so massive that it’s hard to use any traditional investing lessons to explain them. Think meme stock mania or the boatload of other post-pandemic trades that have since fizzled.

On Monday, bitcoin (BTC-USD) rose to over $88,000 per coin for the first time ever, dragging cryptocurrency-related stocks with it. Shares of Coinbase (COIN), which offers cryptocurrency trading on its exchange, are now up more than 70% in the past five days.

And it’s not just crypto either. Tesla (TSLA) stock is up over 50% in the past five sessions. Artificial intelligence names like Palantir (PLTR) are soaring too, with that stock up nearly 50% in the past five days.

Many of these surging trades are part of the so-called Trump trade, in which areas of the market that could benefit from the president’s expected policies are rallying.

But the massive moves indicate there’s more than a fundamental story at play here: They’re a clear sign that the fear of missing out (FOMO) is alive and well in the 2024 stock market rally.

The S&P 500 (^GSPC) is now up roughly 26% year to date, and the risk of underperforming the benchmark is palpable. Some of the best-performing assets over the past week include areas of the market some have previously dubbed undervalued, like small-cap stocks. The Russell 2000 Index (^RUT) is now up almost 10% over a five-day period.

We may be seeing the beginnings of a year-end chase, TPW Advisory founder Jay Pelosky told Yahoo Finance. “Active managers tend to underperform. One of the reasons why is weeks like last week where if you had any cash at all, you were underperforming because the market went up so strongly. So now you set up that chase into year end.”

StockStory aims to help individual investors beat the market.

This chase is on among Wall Street strategists too. Three strategists closely tracked by Yahoo Finance have boosted their views on where the S&P 500 will land in the coming months since the Nov. 6. election results.

“Exuberance lies ahead,” Julian Emanuel, who leads the equity, derivatives, and quantitative strategy team at Evercore ISI, wrote in a note to clients Wednesday night. “President-Elect Trump will move fast on policy initiatives, and stocks will move fast in response.”

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