Jonathan Pinsler is senior vice-president, portfolio manager, of TD Wealth Private Investment Advice.
The trends that have dominated the stock market over the past 18 months are likely to continue in the near term. Growth stocks, particularly in the technology sector , still enjoy favorable conditions despite rich valuations. Given, the timing uncertainty of the next U.S. interest rate move which will likely be lower, this can continue to support elevated valuations of growth stocks. The U.S.
1. Excessive optimism: Investors are reacting extremely positively to tech news that isn’t particularly bullish.3. Market volatility: Even small pullbacks in big tech names can have substantial dollar impacts. 5. Software industry challenges: AI spending is crowding out Software as a Service . Many software companies have been getting punished with poor guidance or missed expectations vs. analyst’s lofty expectations. 1. Narrow market advance driven by a few large companies3. High expectations of future growth