The technology sector, evidenced by the Technology Select Sector SPDR ETF (NYSEArca: XLK), took a hit in the fourth quarter of 2018 due to a bout of volatility, it has since then rebounded, moving past its 200-day moving average in 2019.
“Coming off the lows in December, we thought that was a volatility event. We thought we could get back to those all-time highs by about late March to early April,” said Craig Callahan, president at Icon Funds.
Trade news is also factoring into the surging tech sector as Chinese negotiators are suggesting to combine a U.S. state visit with the signing of a trade deal. China’s hope is that all the trade deal particulars will be squared away prior to President Xi Jinping meeting with U.S. President Donald Trump.
“US-China trade negotiations will likely reach a temporary deal, transforming future negotiations into a framework to monitor China’s compliance with trade and intellectual property policies,” said Alberto Gallo, head of macro strategies at Algebris Investments, wrote in a note.
In the video below, SoftBank chairman and CEO Masayoshi Son sits down with CNBC’s David Faber to discuss what he expects from the future of the tech sector.
With tech giants like Apple Inc starting to regain momentum, will strength in large cap equities continue at the expense of losses in small cap equities?
For investors looking for continued upside in large cap equities over small caps, the Direxion Russell Large Over Small Cap ETF (NYSEArca: RWLS) offers them the ability to benefit not only from large cap equities potentially performing well, but from their outperformance compared to their small cap brethren.
Conversely, if investors believe that small cap equities will outperform large cap equities, the Direxion Russell Small Over Large Cap ETF (NYSEArca: RWSL) provides a means to not only see small cap stocks perform well, but a way to capitalize on their outperformance versus their large cap brethren.
For more relative market trends, visit our Relative Value Channel.
For more market trends, visit ETF Trends.