Managed Money Said Monday, “We are not worried at all about tech”
$AAPL, $AMZN, $FB, $GOOGL, $MSFT
The tech selling dragged down all 3 major US stock market indexes, but not significantly on the day on moderate volume.
Monday, the major US stock market indexes finished at: DJIA -36.30 at 21235.67, NAS Comp -32.45 at 6175.44, S&P 500 -2.38 at 2429.39
Smart money says it is having a hard time deciding whether it’s really a tech-specific sell-off or if this is a valuation pullback, so they are standing pat in here.
Investors took comfort that rather than totally abandoning stocks, some rotated into value sectors. Losses were contained by a continuing rebound in energy and bank stocks.
The overall stock market’s health looks reasonably good because people are rotating, they are not exiting stocks.
Up nearly 14% since President Donald Trump’s Inauguration on 20 January, the technology sector of the S&P 500 has risen to its most expensive since early Y 2008 in terms of P/E expectations.
Tech took over the market leadership from financials and other Key sectors that outperformed after the November Presidential election on notions that President Trump’s agenda of deregulation and tax cuts will benefit the sector.
The 5 largest US companies by market capitalization, Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN) and Facebook (NASDAQ:FB) added more than $600-B in market cap in Y 2017 before the selling started last week, making some analysts wary of the tech sector’s over-extension.
The reversal in technology has given new life to the value trade, that is one in which investors bet on large, undervalued companies and seek dividend payments, I call them Aristocrat Stocks.
The iShares S&P 500 Value ETF is up more than 4% over the last 2 sessions. The fund’s top holdings include Exxon Mobil,(NYSE:XOM) Berkshire Hathaway (NYSE:BRK.A) and JPMorgan (NYSE:JPM)
At the same time, the tech fall is seeing some investors finding opportunities to add to their tech holdings at lower prices.
Most managed money told me Monday, we not worried at all about tech. We just think it is a dip, not a 8-11% correction, and that they are net buyers in here.
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