A falling market often demonstrates how the rich get richer and the poor… get nothing.
Much of the last month, AMD’s (AMD) shares have out-performed Intel’s (INTC). Just over a week ago, AMD’s stock was up almost 10% since early June, and Intel was slightly down. The market was cheered by AMD’s revenue growth in the last quarter, and a modest increase in its gross margins.
But, the threat of a tougher economic market in the form of a falling market turned those tables. Last week, AMD shares dropped over 8% compared to an increase of nearly 2% at AMD.
The movements suggest that in the market psychology a stock can get some benefit of the doubt when the overall trend of the indices are up. Hope begets hope. But, traders punish weak companies in a down market probably on the belief that only the best of times can foster a recovery at firms that have been vulnerable.
That leaves AMD is a bad position.
Douglas A. McIntyre
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