Dear Rundown Reader,
The U.S. / China trade war has taken a lot of scalps so far.
Soybeans, Harley Davidson, the auto industry… Even Alaskan crabbers are feeling the pressure.
But amid the tensions and market chop, there’s still one safe harbour for your money.
The tech sector is bulletproof when it comes to this trade war.
Today’s Rundown shows you why this sector is still the best place to park your money.
Your Rundown for Tuesday, August 14, 2018…
Tech’s Your Trade War Bunker
There’s one thing Trump is reluctant to touch in his trade war.
China’s approach to tech so far is the same.
The tech sector is effectively this trade war’s demilitarized zone.
And when the row gets extra heated, and the market suffers like it did last Friday, tech finds a way to save the day.
FAANGs and the semis powered the market back into the green Monday. Reuters noting this morning: “Tech has kept its crown.”
Not every day is pretty in tech. Recently, a performance driven sell-off in Netflix and Facebook spooked folks good.
Sorry tech bears, the long-term trend is still up, up and up.
Here’s the Nasdaq 100 Tech Sector chart over the past six months compared to the Dow and S&P 500 for perspective:
Sentiment in favor of tech is still sky-high. Reuters states, referencing a BAML survey, “FAANG and BAT are the ‘most crowded’ trades for the seventh straight month.”
China’s BAT group consists of tech giants Baidu, Alibaba and Tencent.
Bears will chime in too many tech stocks are overvalued. But we think that’s bull.
The tech sector’s P/E sits at 33.23 this quarter, according to Siblis Research. Historically speaking that’s right in-line with the average over the past five years.
Long story short, if you’re not betting on tech you’re missing out on great profit chances.
Now, turning to the markets this morning…
Market Rundown for Tues., August 14
S&P 500 futures are up 9.75 at 2,835.
Oil stays flat at $67.97.
Gold’s up $2.90 to $1,201.
Bitcoin goes for $6,020 this morning, according to CoinDesk.
We’ll talk again on Wednesday.
For the Rundown,