Most analysts still think that the bull market will continue, but at a slower pace
Tech stocks have been in focus over the last few days as US tax reform comes into the picture. Increased regulation and a potential shift away from tech towards sectors who may benefit from the tax bill have laid out a bit of question marks for 2018.
Here's what some of Wall Street are thinking:
JP Morgan
- Recommends underweight technology exposure in 2018
- Tech sector faces headwinds from tax-driven rotation out of growth and into value, along with crowded investor positioning
Morgan Stanley
- Remains overweight on FAANG megacap bloc
- History indicates returns may moderate and we question whether growth over value can continue to be as meaningful a driver of returns
- Netflix Inc. and Amazon would likely see the greatest reduction in value in the event of a slowdown in the economy
Bernstein
- Recommends "modest overweight" exposure to tech stocks entering 2018 with valuations remaining attractive compared to the historical averages
- On an equal-weighted basis, relative multiples have fallen in 2017 as appreciation has been fueled entirely by earnings growth
You can view the full article here.
