Hot money: Going from oil to tech?
Posted
Dec 05 2007, 06:45 PM
by
Charley Blaine
It looks to me like the hot money has started to flee crude oil. And the winners from that retreat look like Apple and Google.
Crude peaked on Nov. 21 at an intraday high of $99.29 a barrel -- a day that saw the Dow Jones industrials fall 211 points. It dropped to $86.95 in electronic trading Wednesday night. (Check out this chart of crude oil.) And this despite OPEC's decision to hold its production quotas at current levels at a meeting in Abu Dhabi.
Tech stocks started to move almost as soon as crude peaked and have been among the strongest market sectors in the last few weeks.
Since Nov. 21, the U.S. Oil Fund, the exchange-traded fund that invests in crude oil, has fallen nearly 12%, while Apple is up 10%. Google is up nearly 6%. The Morgan Stanley High-Technology 35 Index is up nealry 5%.
Sure, you can argue that the technology rise has everything to do with the big stock rally that started on Nov. 27.
But Google and Apple, especially, have been stocks that have attracted a lot of momentum players. They have big market capitalizations and, especially in the case of Apple, lots of shares outstanding that absorb the friction created by a lot of trading.
