- Technology shares — a key engine of the stock market’s climb to records over the last several months — are now among those leading Wall Street’s plunge on growing concerns over the coronavirus outbreak.
Investors poured billions into big technology stocks and other momentum bets last year, as a dovish Federal Reserve stoked risk appetite and fueled a rally of more than 30% in the S&P 500. Some big technology and momentum stocks kept griding higher, driving markets to records even as concerns grew over the virus’ spread in China in recent weeks.
Stanton rode shares of Amazon and other big technology names higher last year. He now owns derivatives will rise if the tech-heavy Nasdaq Composite index continues to decline. That magnitude of concentration in a small universe of names had some investors worried that they have become overstretched and vulnerable to a sudden reversal in risk appetite. The tech sector’s valuation recently stood at its highest forward price-to-earnings multiple since 2004, according to Refinitiv Datastream.
This article doesn’t explore the connection between tech stocks and the coronavirus. Is it just that so much hardware is now manufactured in China, and supply lines may now be disrupted? Or are there other factors specific to tech?
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Fonte: WSJ - 🏆 98. / 63 Leggi di più »