147 days ago • Posted by Martin Boujol
Will the tech sector fall? Unlikely.
Looking at today's chart from Bespoke Investment Group, we see that days where the NASDAQ was down 2% or more while the less-tech-driven Dow Jones was up are mainly clustered around the 2000-2001 dotcom bubble. The question is: should we expect the same to happen soon? Rather not. Of course, the Dow will tend to outperform tech stocks in the coming months as it will be much more sensible to the economy reopening. But very strong GDP and earnings growth will continue to push stocks up. Tech valuations are high but not as absurd as in 2000. Remember that at that time, the US 10-year treasury yield was at 6%. According to Robeco Analyst Jeroen Blokland, the Dow will continue to make highs, while tech stocks will stay a little behind.
Source: Bespoke, Robeco