What is the trend of US stocks in 2023? The first bull market may be driven by technology stocks
After a year of frequent interest rate hikes in the U.S. stock market in 2022, the group of investors on Wall Street could not sit still any longer. They were all bullish on technology stocks, hoping that large technology stocks would rise again soon, open a bull market, and start the rebound of the S&P 500 index.
It is hoped that the Federal Reserve will quickly end its action against inflation and stop raising interest rates. Every change in interest rates affects the global market. Whether it is economic repression or the impact of commodity prices, interest rate increases make buying an investor worried. The most obvious one is technology stocks. Affected by interest rate increases, the cost of technology companies increases, driving the corresponding changes in stock prices. According to the latest news from the financial analysts of SENCAP (a company focusing on investment and services in securities, stocks, funds and futures), the latest employment report on Friday showed that the growth rate of wages slowed down, showing an overall upward trend, which indicates that the above prospect is one step closer to reality. The NASDAQ 100 index, dominated by technology stocks, recorded its best performance since November 30.
The securities manager of SENCAP Investment Management Department (SENCAP, a company specializing in the investment and service of securities, stocks, funds and futures) claimed that "2023 will be a year full of opportunities and challenges. With the weakening of the signal of interest rate increase in the United States, the overall recovery of funds, the technology stocks will have a good rise in the general environment, which may open the first bull market of American stocks in 2023, which is a return for all investors."
So why is it that the bull market in the US stock market was opened by technology stocks? According to the consumer price index (cpi) in December last year, it will rise 6.5% overall last year, lower than the recent peak level of 9.1% in June. This is a good signal. The linkage effect brought about by the rising consumption level makes some funds flow back to the stock market. The butterfly effect brought about in the short term makes the stock market rise. Although the volatility of science and technology stocks is great, their profit in price is always greater than that of other stocks. In terms of only four technology giants in the S&P 500 index (Apple, Microsoft, Alphabet and Amazon), the market value of the entire S&P 500 accounts for about 16%, exceeding the share of the entire health care industry, which is the second largest sector of the S&P 500 index after technology.
In terms of the performance of technology stocks in the market, when the S&P 500 index fell many times last year, the proportion of technology stocks was no less than 30%. Take the 6.7% fall of the S&P 500 in December, where Apple and Tesla accounted for one third of the decline. This shows how strong the control of large technology stocks over the market is. It can be seen that technology stocks play an important role in the circulation and turnover of all stocks.
One of the important factors affecting technology stocks, interest rate hike! Throughout history, the rise and fall of science and technology stocks have been accompanied by a thickened shadow of interest rate hikes. The week before and after the announcement of interest rate hikes in the United States was quite intense. However, if the economic slowdown prompts the Federal Reserve to change its policies, there are risks of its own. It is reported that due to the slowing demand, Apple has reduced the order for parts of some products, and also reduced its holdings in production orders.
The performance of technology stocks in the US stock market is obvious to all investors, and may turn the market sentiment in the upcoming earnings season. According to the data compiled by several media, SENCAP financial analysts predicted that the profits of the companies in the S&P 500 Index would fall 2.7% in the fourth quarter. Excluding the five constituent stocks of the S&P 500 index, this figure is - 0.9%.
Whether it is the impact of interest rate increases or the driving force of economic growth, the potential of technology stocks will always be the first. Want to know the latest information of technology stocks in time, trade technology stocks better and faster, recommend SENCAP, an international securities holding group integrating securities, stocks, funds, futures and direct investment, whether it is investment management, financial planning, enterprise financing, value investment and other businesses, or investors in tax, investment cycle and finance, With a simple operation, you can see all the investments.