The teflon rally

tech stocks

Tech stocks have been taking a thrashing in recent weeks, but the overall market hasn’t as the first half of 2017 drew to a close.

That has surprised some analysts, who worried a downturn in heavily-weighted tech stocks would deep-six the entire market.

That hasn’t happened, according to an analysis by the Bespoke Investment Group.

 

tech stocks

 

Tech Titans

Take a look at the performance of the so-called FAANG stocks, as in Facebook (FB), Amazon (AMNZ), Apple (APPL), Netflix (NFLX) and Google (GOOGL), and the S&P 500 Technology Sector.

The bellwether FAANG stocks are down 4.1% year-to-date through June 29, while the S&P tech sector is off 2.6%.

 

Source: Bespoke Investment Group

Source: Bespoke Investment Group

 

Deep Bench

Turns out the current stock rally runs deep across a number of sectors.

While tech is down, other sectors are performing well and taking up some of the slack.

In the first half, healthcare is up 4.2%, while financials (+3.2%), and real estate (+2.0%) are also in positive territory.

 

Source: Bespoke Investment Group

Source: Bespoke Investment Group

 

Positive Territory

So far, the overall market has shrugged off the pullback in tech stocks.

The S&P 500 Index, up about 8% for the year, has only given up about 0.5% since tech stocks started to tumble.

 

stocks

Source: Bespoke Investment Group

 

Takeaway

Analysts remain split on the outlook for stocks in the second half of 2017, according to this post by the Wall Street Journal.  

The average year-end target for the S&P 500 among the 20 analysts surveyed by Birinyi Associates stands at 2439. The S&P closed on June 29 at 2421.

 

stocks

 

Yet so far at least, the market’s foundation looks pretty solid.

It will take more than a tech share slump to end this historic bull market in my opinion.

Photo Credit: Pricenfees via Flickr Creative Commons