Tencent Technology News, December 28 news, because higher valuations, regulatory risks and the plunge of some stocks may weaken the attractiveness of technology stocks, investors have begun to weigh the scale of investment in US technology stocks in the coming year. The surge in technology stocks and Internet-related stocks helped the US stock index rise to its highest level this year. According to S&P Dow Jones Indices analyst Howard Silverblatt (Howard Silverblatt), as of December 16, the gains of Apple, Amazon and Microsoft alone contributed 16.6% to the S&P 500 this year. More than half of the total increase.
In recent weeks, technology stocks have begun to take a back seat as the hope of a vaccine-led economic recovery has promoted the rebound in energy, finance, small caps and other less popular market sectors. Since the release of breakthrough vaccine data in early November, the Russell 1000 index has risen 10%, while the Russell Growth Index, which is mainly composed of technology stocks, has risen only 4%.
Although it is unclear how long the change in market leadership will last, this shift highlights a dilemma that investors have faced in the past decade. For many years, limiting the risk of technology stocks has been a failed bet, and the new crown pneumonia pandemic has accelerated the trend in favor of the technology sector. The valuation of , but close to a 16-year high, has raised concerns about the fragility of the technology industry, especially if the US economy reopens to create sustainable trading in value stocks.
"I think people will stick to their investment in technology stocks, but I don't think there will be a lot of new money invested in technology stocks in the new year," Ally Invest Chief Investment Strategist Lindsey Bell (Lindsey Bell) Say.
The stocks of the technology industry and large technology-related companies-Amazon, Google parent company Alphabet and Facebook-account for about 37% of the market capitalization-weighted S&P 500 index, which makes them hugely vulnerable to index volatility and investor portfolios Influence.
According to Refinitiv data, although technology stocks with a P/E ratio of 26 times are one of the few industries that are expected to increase profits in 2020, they are expected to increase their earnings by 14.2% next year, which is lower than that of S&P 500 companies due to potential growth rebound. The overall increase was 23.2%. Mona Mahajan, senior US investment strategist at Allianz Global Investors, said: "We continue to believe that the value cycle that we have seen in the past few weeks will continue into 2021. "Z2z
At the same time, the efforts of US and European regulators to curb market dominance of companies such as Alphabet and Facebook are another pressure on the technology sector. However, in the context of slow economic growth, trade conflicts and the global new crown pneumonia pandemic, many investors are willing to retain technology stocks that have proven to be durable. In fact, the surge in uncertainty in recent months has often led investors to turn to technology stocks. "Very few industries are predictable," said Adams Funds CEO Mark Stoeckle (Mark Stoeckle). The fund's diversified equity fund mainly holds shares of Microsoft, Apple and Amazon. According to data from the
fund analysis company Lipper, the ETF Invesco QQQ Trust, which invests in the Nasdaq 100 index, set a new high in trading volume this month. Michael Arone, chief investment strategist at Wall Street Global Advisors, predicts that the economy will return to a lower growth rate after it recovers in 2021. "This shows that you want to have a company with a high organic growth rate and achieve compound cash flow better than other companies," Allen said.
Even some strategists who like other stocks have not stayed away from technology stocks. In 2021, BMO Capital Markets will reduce technology stocks to "market weight" but urge investors to maintain positions rather than sell off. "I don't think we will give up technology," said Esty Dwek, head of global market strategy at Natixis Investment Managers. "These companies have become an inseparable part of our lives." (Compiled by Tencent Technology/Wuji)
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