Macro Minutes: Info Tech Sector Update

This edition of the Macro Minutes video series features Capital Markets Research Analyst Tim Schluter providing an update on the Info Tech sector. Tim addresses how Tech has made it through the year relatively unscathed as technology itself has become the economy’s connective tissue amid COVID-19 disruptions.

Key Points

  • The S&P has recovered almost 40% since March lows, which we primarily contribute to markets pre-pricing a brighter economic future, with most COVID-19 economic contractions deemed to be self-inflicted and temporary in nature.
  • The economic fallout from COVID-19 has been disproportionately hard on travel, hospitality, retail, and restaurant related industries. While these highly visible slices of the economy make up a sizable portion of the US labor market and GDP contribution, they have less impact on large cap indices. Tech and Tech-like industries, which account for nearly 40% of the S&P, saw minimal labor disruptions.
  • Many fear Tech valuations are elevated, and while valuations are high by some metrics, we view them as largely justified by fundamentals that continue to beat expectations.
  • The case for Tech has improved this year, as outperformance has only grown. Large gains occurred in e-commerce as consumer behavior shifted to online consumption, benefiting Tech and Tech-like stocks.

*The foregoing information constitutes the views of Fisher Investments based on information believed to be reliable. There can be no assurances that Fisher Investments will continue to hold these views. These views may change at any time based on new information, analysis, or reconsideration.
About Fisher Investments

Founded in 1979, Fisher Investments is an independent, fee-only investment adviser with $197 billion under management.* Fisher Investments maintains four principal business units, Fisher Investments Institutional Group, Fisher Investments Private Client Group, Fisher Investments 401(k) Solutions Group and Fisher Investments Private Client Group International, which serve a global client base of diverse investors. The clients of Fisher Investments and its affiliates include over 100,000 clients. Founder and Executive Chairman Ken Fisher’s “Portfolio Strategy” column for Forbes ran from 1984 through 2016, making him the longest continually running columnist in the magazine’s 90+ year history. He has also authored several New York Times bestsellers on finance and investing. (*As of 3/31/2022)