US technology giants are now behaving like a defensive investment, says John Authers on Bloomberg. While global stockmarkets tanked at the start of this week, high-flying companies such as Apple and Amazon gained again.
That goes to show that the tech pullback that rattled investors earlier this month was a sign of bullishness, not bearishness, says Authers. Growing confidence about economic reopening and hope that a vaccine will deliver us from the pandemic sparked a shift into sectors such as banks that are likely to benefit. This week’s second wave fears undid that, sending them fleeing back into tech. With an “entrenched competitive position” and “relative immunity” to pandemic disruption, technology has become the equity investor’s safe-haven of choice.
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