The S&P Technology sector is having a pretty good week, but the index has been stuck in a narrow range since breaking out in late July. There has been jockeying for leadership since then, but usually when one niche is rocking, the other is reeling.
- Hardware +55%
- Software +38%
- Semiconductors +34%
Lots of hot money is going into Technology, like electric vehicle stocks, which are not represented in the S&P (soon Tesla will be the lone rep), and the stay at home stocks have caught a bid.
More broadly, the stock market keeps spinning its wheels. Energy is the big winner of the week, and utilities are the big loser; although, up today.
It’s not a bad time to take some money off the table, especially in names that are stalling (make sure to recheck the investment proposition).
There is a lot of guessing going on over the impact of additional lockdowns and restrictions. I think this will be a strong consumer Christmas, in part because we are going to be separated. The experts have misjudged everything from housing, to manufacturing, to the rebound in jobs, to the duration of the bear market, and this week, underestimating by a country mile demand for Thanksgiving turkeys.
Of course, the economy will slow, but a lot of that will create pint-up demand, and the market reads into that as much as current headlines. I want to be mostly long and will continue to seek entries on slight dips or the occasional breakout.
Have a great weekend. Be well and stay safe.
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