Excerpt from Barron’s latest article quoting DataTrek co-founder Nick Colas:
…. “Is there anything else supporting stocks? DataTrek’s Nicholas Colas thinks that interest rates have a lot to do with it: Investors’ uncertainty has weighed on U.S. Treasury yields, which is supportive of equities. Global interest rates are quite low too, and there’s the hope that the Fed, worried about the effect of tariffs on the economy, will only hike rates one more time this year.
Colas also notes that tech, which has been leading the market for some time, benefits from the fact that it has less exposure to trade policy woes than other industries. Of the Fang stocks–Facebook (FB), Amazon.com (AMZN), Netflix (NFLX) and Google parent Alphabet (GOOGL)–the first and last are banned in China, while the middle to have very little presence. Apple (AAPL) “seems naturally hedged by being a large employer in China and a systematically important part of the US equity market.” With such a heavy weighting in the S&P 500, the sector can easily boost the index despite industrial stocks’ woes.”….
Read the full article here on Barron’s!