"So it shows that a market can absorb a prolonged rotation without obvious index-level stress for some time. But the longer and deeper the sell-off in a dominant sector becomes, the harder it is for the broader index to withstand the drag, and the continued losses for tech in 2000 ultimately meant the S&P 500 ended that year over -10% lower."
"Deutsche Bank also report that risk assets came under mounting pressure over the last 24 hours, as concerns around AI and a weak batch of US data led to growing questions about the near-term outlook. Share Stellantis's swerve away from electric cars (see earlier post) is particularly surprising when you look at the Norwegian auto market. Just seven new petrol cars were sold in Norway last month, data shows, as drivers snapped up more than 2,000 battery electric vehicles (BEVs) instead."
"The iShares Expanded Tech-Software Sector ETF, which tracks the sector, has tumbled by around 25% so far this year, highlighting the scale of the selloff in the last few weeks. Bloomberg reported on Wednesday that almost $1tn had been wiped off the sector over the previous seven days. Share Data yesterday showing a surge in US company layoffs in January (see yesterday's blog) is also being blamed for the slide in riskier assets."
UK's FTSE 100 is down just 0.07% as investors rotate into other sectors despite drops in software and data companies. Deutsche Bank analysts note the pattern echoes March 2000, when tech declines coincided with rallies in consumer staples, utilities and healthcare and the S&P 500 briefly neared its earlier record before finishing the year over 10% lower. The iShares Expanded Tech-Software Sector ETF has tumbled around 25% year-to-date, and Bloomberg reports almost $1tn was wiped off the sector in seven days. Risk assets faced mounting pressure from AI concerns, weak US data and a surge in January layoffs. Norway sold only seven new petrol cars last month while over 2,000 BEVs were purchased.
Read at www.theguardian.com
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