Is the Technology Sector Losing Its Luster?
The technology sector in November
The technology sector (COMP-INDEX) has remained the top-performing sector of the S&P 500 Index (SPX-INDEX) (SPY) on a year-to-date basis. The Technology Select Sector SPDR ETF (XLK), which tracks the performance of the technology sector, has risen 32.8% so far this year as of December 1, 2017. It has added more value to the S&P 500 Index (QQQ).
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In November 2017, the XLK returned 1.4%. On November 29, 2017, it saw a big drop in performance, falling 2.2%. Some sector rotation by market participants hampered the sector’s performance.
Solid economic data are helping the Fed stick with its gradual rate hike process. The expected rate hike in its December meeting is bringing investors’ money into the financial sector. On the other hand, it seems like investors are taking some of their money out of high-growth sectors such as technology and semiconductors, which impacted the technology sector’s performance in November.
On November 29, 2017, the VanEck Vectors Semiconductor ETF (SMH), which tracks the performance of the semiconductor industry, fell 4.2%. The iShares PHLX Semiconductor ETF (SOXX) fell 4.4% on the same day.
In the next part of this series, we’ll analyze the performance of the utility sector.