Facebook will report results on Wednesday, April 27. Market observers, though, expect the social media company to announce improved ad revenue, especially from its mobile advertising platform. Market cap-weighted tech sector ETFs have a large weighting in the two companies. For example, QQQ has a 11.4% tilt toward AAPL and 4.9% in FB. XLK holds 14.1% AAPL and 6.1% in FB.
Tech ETFs face another problem: Weakness in semiconductor stocks. The semiconductor industry faces some headwinds. Research firm Gartner anticipates that worldwide shipments of personal computers, tablets and smartphones rose only modestly last year, which could cause chip sales to decline.
“The bottom line is that many big tech names now show both fundamental and technical problems. But the scariest chart of them all is the breakdown in the Technology Select Sector SPDR exchange-traded fund (XLK) in both absolute and relative terms. This ETF has now run into resistance four times since October and sports its own downside breakaway gap,” according to Barron’s.
[related_stories]Technology Select Sector SPDR
