Tech stocks took some heat today as the NASDAQ Composite Index sold off a little over a half percent on lighter volume, regaining and holding its 10-day moving average after pushing lower earlier in the day. The S&P 500 displayed relative strength by holding support at its 10-dma and closing roughly flat at -1.26 points on the day on lighter volume.
While most pundits view the oncoming rush of deficit stimulus spending from the government as bullish for stocks, the main issue for the market may be something they are missing. That would be higher interest rates. In my view, as interest rates continue to rise, this will at some point put pressure on stocks, especially given the wild P/E expansions we’ve seen in them.
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