Blue-chip stocks are continuing their rally today following some bullish comments from a prominent hedge-fund manager. With roughly an hour left in the trading session, the Dow Jones Industrial Average (DJINDICES:^DJI) is up by 84 points, or 0.56%.
Early this morning on CNBC, the founder and chief investment officer of Appaloosa Management, David Tepper, told the hosts of Squawk Box that he's "definitely bullish" on stocks right now. His thesis pivots around the likelihood that the Federal Reserve will ease back on its $85 billion in monthly bond purchases, otherwise known as quantitative easing.
"If the Fed doesn't taper back, we're going to get into this hyper-drive market," Tepper noted. "It's a backwards argument. To keep the markets going up at a steady pace the Fed has to taper back." And with respect to banks in particular, he said that it's a "good sector." For investors, in other words, it's a win-win scenario.
On the heels of this news, shares of Bank of America (NYSE:BAC) led the Dow higher, up by 2.2% at the time of writing. As I discussed this morning, the bank has distinguished itself of late by clearing up a number of outstanding legal issues over the last few months. That, as well as its ongoing share buyback program, is bound to push shares of the lender up until its valuation is more in line with competitors such as JPMorgan Chase and Wells Fargo.
On the other end of the spectrum, shares of multiple technology companies are missing out on the rally, including Intel (NASDAQ:INTC), which is down 1%. This sector has been hit hard of late due to the waning demand for personal computers. To add insult to injury, moreover, one well-known Silicon Valley insider has said that the industry is in the midst of a "tech depression."
"A lot of people got burned during the dot-com crash," said Marc Andreessen, co-founder of venture capital firm Andreessen Horowitz, "so I think we are living through the other side of that. I think we are living through sort of the tech depression, is the term I've used."