Tech Giants Emerge as Alternative Inflation Hedge Over Gold, Survey Finds

According to a recent Bloomberg Markets Live Pulse survey, while gold is still considered the best hedge against inflation by 46% of respondents, nearly a third believe that tech giants such as Nvidia, Amazon, and Meta Platforms (formerly known as Facebook) provide a better safeguard against inflation risks. This shift in perception can be attributed to the fact that these tech companies have generated steady profits, leading to significant stock price increases, including Nvidia’s sixfold surge since inflation exceeded 2% in March 2021. However, it should be noted that growth stocks, including tech companies, are sensitive to changes in inflation and interest rates due to their high valuations based on future profits. Other notable findings of the survey include the US dollar being viewed as the best currency for weathering market turbulence by three-quarters of respondents, the Swiss franc being the second-best currency with around 23% of the vote, and the Japanese yen receiving approximately six times fewer votes due to its depreciation against the dollar and the ultra-easy monetary policy in Japan. Additionally, respondents believe that a US recession poses the top risk for 2024, and cash flowing into the US is keeping bonds performing well despite inflation and interest rate changes.