Published On: Fri, Nov 9th, 2018

Forget Black Swan, just look to the mandarin duck

So how’s everyone feeling about their tech holdings?

The most common answer to this question from your everyday trader probably wavers between “better, but not great” and “pretty nervous” — and probably the latter right now with S&P 500 futures peeling back by ~15 handles this morning — I mean, who’s to blame them after the roller coaster that we’ve all been through over the past month and change?

In many ways, Central Park’s exotic visitor is a lot like the tech market, says Arie Shapira
In many ways, Central Park’s exotic visitor is a lot like the tech market, says Arie Shapira  (Eduardo Munoz Alvarez / GETTY IMAGES)

The feeling I get about tech right now is like the feeling a lot of people in New York City have right now about that rare Mandarin duck squatting in the ponds of Central Park.

I realize not everyone who reads this column lives and/or works in Manhattan, and so may have zero clue as to what I’m referring to. I also realize that this may be one of the worst analogies ever (or the best), but stay with me.

Basically, our colorful feathered friend with the hot pink bill has been a gorgeous spectacle for a nice length of time, like the parabolic uptrend in the FAANGs over a nine-and-a-half year stretch of the bull market.

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Then, in a flash, it disappeared and gave everyone a heart attack, similar to what happened during the meltdown in October when the XLK agonizingly pulled back by ~14% from its peak to trough.

Shortly thereafter, that magical duck that’s native to East Asia and most certainly not Manhattan reappeared again, untouched and in all of its regal-looking glory, ready to absorb all of our undivided attention once again, just like where we stand right now with the wannabe-trillion-dollar tech megacaps of the world.

But I digress. Let’s not get all philosophical with the pheasants. It’s Friday and many brains on the Street are fried from what we’ve all gone through of late, from the onslaught on equities during the month of October to the recent stomach-churning bounce in the tape that no one can really trust to the culmination of an earnings season that dug up more questions about the future than answers.

We have another busy week ahead (as the next section tells us) so please take a few deep breaths, enjoy the weekend and if you’re a tech bull for life, maybe take a stroll to the southeast corner of Central Park over the next couple days just to make sure that cheeky-looking fowl is still perched in its favorite spot, soaking up the sun and loving life.

On Tap for Next Week

Earnings season is more or less over, but we’re still awaiting on tech behemoth in Tencent (the ~$ 340 billion (U.S.) market cap “T” in the BAT complex) as well as several companies whose fiscal quarter ended in October, like Cisco, Nvidia, and Applied Materials in addition to a slew of retailers from Walmart and Home Depot to Macy’s, Nordstrom and J.C. Penney.

Meanwhile, four of Canada’s largest pot companies (yes, that includes Tilray) will give their lay of the land ever since the country legalized recreational marijuana nearly a month ago. Recall that the group had a mini-resurrection Wednesday after steadfast cannabis opponent Jeff Sessions got the boot.

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But with earnings winding down comes the beginning of conference season, where we’ll get a couple of major health-care events in addition to many tech and consumer heavyweights presenting at UBS and Morgan Stanley, respectively. Names like Kellogg, Liberty Media, 3M, Shutterfly, and BB&T will hold analyst and investor meetings.

On the macro end, we’ll get plenty of Fed speak, now that one of the most drab meetings of the year is out of the way and all eyes are on the expected rate hike in December — Quarles testifying before Congress, Powell talking at the Dallas Fed event, and Daly giving her first full-fledged speech since getting the job are the likely highlights.

We’re also waiting for Italy’s new budget and a pair of Asian summits, where we could see commentary surrounding the trade war make waves, though Trump is sending Pence in his place.

Lastly, next Wednesday is the deadline for funds to file their third-quarter holdings. These 13-Fs should give us some insight into who may have been left holding the bag when tech got wrecked in October, but it won’t tell the whole story in terms of who panic sold, who doubled down, and so forth.

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TORONTO STAR

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Forget Black Swan, just look to the mandarin duck