“Technology companies have been a driving force behind the U.S. stock market’s recent record rally, and despite mounting evidence of stretched valuations the sector remains a top pick for investors expecting a wave of capital expenditures by U.S. corporations,” Noel Randewich reports for Reuters.
“Corporate tax cuts and reduced regulations planned by President Donald Trump will give companies reason to spend more on cloud computing, factory automation and smart connectivity that will directly benefit Silicon Valley, many on Wall Street believe,” Randewich reports. “‘The tax cuts are going to promote business investment across all industries, and the business investment is largely going to be in technology,’ said Doug Cote, chief market strategist at Voya Investment Management in New York.”
“Strong performances from big names including Apple Inc. and Facebook Inc. have helped make technology the strongest S&P 500 sector so far this year, surging 10 percent compared to the broader index’s 6 percent rise,” Randewich reports. “‘We may be due for a little bit of a pullback, but we’re still buyers on weakness because we like the longer-term outlook over the next two to three years,’ said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.”
“Improved employment and consumer confidence have also been behind investors’ optimism about tech, helping offset concerns about lofty valuations,” Randewich reports. “‘I can’t remember a time when we’ve seen this much excitement,’ Wedbush trader Joel Kulina said. ‘Semiconductors aren’t as cyclical as they used to be, where quarters were driven by PC demand. Now it’s automotive, it’s data center, industrial automation.'”
Read more in the full article here.
MacDailyNews Take: Apple is merely one Bank of America away from a $1 trillion market cap!
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