US Equities (^GSPC, ^DJI, ^IXIC) are jumping higher as Big Tech seems to be rebounding after having a down week with many investors rotating to small and mid caps. With new economic data in the form of Personal Consumption Expenditures Index (PCE) signaling inflation may be under control, many expect the Federal Reserve to make its first interest rate cut. Could this impact the way the market has played out with Big Tech and the chip sector?
Catalyst Funds Co-Founder & CIO David Miller joins the show to give insight into what recent economic data suggests for the Fed, the tech sector, and the broader markets moving forward.
” I think you’re seeing some of this weak inflation data indicating, inflation growth is actually slowing that. That’s giving the market more of an all clear signal that the Fed is going to go ahead and finally do it. And cut rates. So I think that’s more of the response that we’re seeing in equities today.” says Miller
Speaking on rotation out of tech and whether or not it should be considered a “rout”, he relates back to Alphabet and Tesla: “I don’t think it’s a rout in the tech space. Like if you look at Google in particular, you know, they’re trading at probably about slightly under 20 times forward earnings. They’re growing revenue about 14%. They had like 29% earnings growth. I think it’s pretty unlikely that there’s going to be a rout. The only real weakness we saw, like for example with Google was on the YouTube numbers that came in at 13%. But you know, we’re still talking about double digit growth. The real weakness, I guess, whether you call it auto or tech, was really more on Tesla, where you saw two sequential revenue declines, you know, totaling about 7% and real delays on whether their self-driving car service is really going to happen any time in the near future.”
#youtube #TECH #stocks
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