Tech is tanking, so bye-bye bull market—that’s logic many pundits peddled ever since the FANGs and big name Tech stocks started September’s swoon. They claim Tech fueled the market’s post-March rise--so what kills Tech, kills this young bull market, too. It sounds compelling. But it’s wrong. This global rebound—and Tech’s leadership in it—is far more durable than most fathom. Here’s why.
Yes, already leading pre-COVID, Tech’s strong balance sheets and cash flows cushioned the contraction’s blow. Then, too, Tech’s business models synced seamlessly with a socially distanced, heavily virtual world.Hence, Tech stocks outperformed in the winter’s bear market—and soared in the rebound. They surged 80.5% from March 23’s low through September 2’s recent high, trouncing global stocks’ 56.9% rise. The Tech-like FANGs—Facebook, Amazon, Netflix and Google—zoomed, too. Given that America totals nearly 90% of the global Tech sector’s market cap and has all four FANGs, US stock indices shined.
Read Full Article »
