How the Technology Sector Performed in April



Technology sector in April

The technology sector remained flat in April. The Technology Select Sector SPDR ETF (XLK), which tracks the performance of the US technology sector, rose 0.01% in April. The sector saw losses in March, as Facebook’s (FB) data breach issue affected the overall performance of the US technology sector during the month.

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Major technology companies have reported earnings results for the first quarter. Facebook reported 1Q18 earnings of $1.69 per share on April 25, which beat the analysts’ estimate of $1.35 per share. Facebook’s earnings beat the market expectation substantially. However, worries about the data breach issue affected investor sentiment. Billionaire investor Jeffrey Gundlach recently said at the 2018 Sohn Investment Conference that it’s time to short Facebook because he believes the user data leak will have a bad impact on this stock.

Apple reported its 2Q18 earnings report on May 1. Its EPS was at $2.73 as compared to the market estimate of $2.67. The company also provided strong guidance for 2018 despite the US-China trade conflict. As the technology sector has a strong positive correlation with the S&P 500 Index (SPY), an improvement in this sector would also be helpful for the S&P 500 Index.

Major holdings of the XLK such as Alphabet (GOOGL), Facebook (FB), and Apple (AAPL) returned -1.6%, 7.6%, and -1.5%, respectively, in April 2018.

In the next part of this series, we’ll analyze the performance of the energy sector in April 2018.


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