A key sector takes it on the chin…
The US technology sector has been a key leader in the US stock market for the past several years, and this year has been no exception. Yet, the past few weeks have seen a number of dominant technology companies’ stock prices stumbling while the broader market continues to rise. The sector has given back quite a bit of outperformance in a short period of time as the market appears to be rotating away from more growth-oriented toward more value-oriented sectors. The question remains whether the technology sector is simply consolidating outsized gains or does this truly mark a change in market leadership. Technology valuations are trading at a premium to the overall stock market, but not at historical extremes. So, for the time being we view the past few weeks as a healthy consolidation and we will continue to monitor this key position.
