Скачать или смотреть What is driving the tech rally?

Growth and Technology finally took a break from its newly formed bull market yesterday. But this doesn’t mean an end to risk on trading. The growth outperformance since mid-June has been somewhat of a headscratcher for many investors, as record inflation continues to persists, broad growth valuations are NOT cheap, future estimates are being revised down and there’s not sign of FOMC slowdown just yet. However sentiment seems to be that 2023 will be better.

With over 90% of companies reported, it isn’t looking so rosy for the next four quarters. ALL major indices and the S&P 500 Technology sector have sharply reduced growth for ALL four next quarters. Some of the sharpest revisions for large caps are in the next 2 quarters, so lets hope companies are able to beat estimates.

Analysts are reducing estimates across board, growth value, small or large, making stocks more expensive. It seems the positive sentiment is stemming from the hope that the Federal Reserve will slow or even decrease rates in 2023. It seems as if investors are looking beyond the next 4 quarters and into the 2nd half of 2023.

The Trend is Your Friend
I still advocate taking on more risk, investing in smaller companies which have outperformed in recent days, (AZPN, Aspen Technology, a recommendation from last month is still recommended) as long as Treasury rates are in a decline. As long as raw materials and interest rates are declining, one should add opportunistically. But put in those stop losses in case concerns over fundamentals catch up!!