Investors and financial experts are betting that the market’s recent record-setting performance isn’t going to slow down anytime soon, throwing hundreds of millions behind technology and financial stocks.
The recent boom in the markets is fueled primarily by the technology sector, and investors are tailoring their strategies to keep up with this trend. Optimism remains high, resting on the hopes that President Donald Trump will come through on his promises to cut taxes and massively deregulate the economy.
“The tax cuts are going to promote business investment across all industries, and the business investment is largely going to be in technology,” Chief Market Strategist at Voya Investment Management in New York, Doug Cote, told reporters. Cote’s predictions may be on-point, since investors have pumped some $325 million into U.S. tech sector in the last month alone.
The Dow Jones Industrial average posted two thousand-point jumps in the months since President Donald Trump took office. The S&P 500 set an all-time intra-day trading record Wednesday, rising above 2,400 for the first time in its history. The technology sector of the S&P 500 is outpacing the index by 4 percent, with stocks like Apple and Facebook leading the charge, and tech stocks are trading at 17.9 times expected earnings–a staggering figure. Tech earnings in the S&P grew 12.3 percent in the final quarter of 2016, a faster rate than any other sector.
The strong performance of the stock market increased consumer spending, and more optimistic predictions for future growth have Fed Chairwoman Janet Yellen saying that interest rates will likely rise in the coming months.
The Fed’s decision will likely come at around the same time the Department of Labor releases its monthly non-farm payrolls report Mar. 10. Traders are betting at 3-to-1 odds that the Fed will raise rates next month, Reuters reports.
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