There is never a good time to hear bad news, but at this particular time, investors in the Technology Select Sector SPDR (NYSEArca: XLK) and rival technology exchange traded funds probably do not want to hear concerning news about big-name tech stocks. However, that is exactly what those investors might have to deal with in the near-term.
In addition to XLK technology-specific ETFs, funds such as the PowerShares QQQ (NasdaqGM: QQQ), which tracks the tech heavy Nasdaq-100 Index, are expected to come under pressure. Google parent company Alphabet and Microsoft lost $30 billion each in market cap after their weak first quarter results, dragging on the broader tech sector.
Tech investors will be watching for Apple’s first quarter announcement on Tuesday, April 26 after the close. However, the outlook doesn’t look too promising. Some project the first year-over-year decline in iPhone unit sales.
Investors have grown increasingly concerned over the company’s iPhone sales growth, especially with China experiencing an economic slowdown. ETF investors will also have to keep a close eye on AAPL as the company makes up double-digit weights in most broad tech-sector ETFs
“On Friday, April 15, reports of weak iPhone sales contributed to a 2% drop in Apple’s stock, but did not create any technical issues. Unfortunately, the stock fell another 2% the following Monday to create a downside breakaway gap as it sliced below its February trendline. We will have to see what happens after actual earnings are announced, but for now, the rising trend is over,” reports Michael Kahn for Barron’s.
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