Strategists warn that tech and big internet names could begin to suffer again as the Federal Reserve raises interest rates or even holds them at high levels.
The futures market Thursday was pricing in strong odds of a quarter-point rate hike from the Federal Reserve next week. But even though tech is vulnerable when rates rise, the dramatic fluctuations in bond yields and concerns about the financial sector pushed investors into the relative safety of big cap tech. The big cap tech names are benefiting from a flight-to-quality within the sector, since those stocks have strong cash flow and reliable earnings.
line techs Apple was up 5% for the week-to-date as of Thursday, while Microsoft was up 11.1% for the week as of Thursday's close. Alphabet was higher by 10.7%, and Amazon gained 10.3% for the week, also through Thursday. "I think inflation is going to be with us for awhile," said Jeff Kleintop, chief global investment strategist at Charles Schwab. "That may prevent the central banks from declaring victory...
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