(New York)

Advisors need to be aware. In less than 8 weeks, everything you know about the market make up of the tech sector is going to change. Both MSCI and S&P are shifting the way they group technology companies. Netflix, Google, and Facebook will be the biggest movers, and the changes are expected to have a material affect on prices. Those three stocks will be moved to the newly formed “Communications Services” sector, and away from the two sectors they are currently split into. That will greatly lower the total weight of the Information Technology sector from 26% to 20% of the S&P 500.

FINSUM: This could really change prices as it will have a significant effect on ETF demand and other funds linked to specific indexes/sectors.


The bad news just keeps on coming for the tech industry. Already this morning there is a lot of negative press about Google allowing third party developers to actually read users’ Gmail accounts, and now comes the news that the SEC has opened an investigation into Facebook for its data breaches. The SEC is looking at Facebook’s disclosures of the breach, and in particular, Mark Zuckerberg’s congressional testimony. Facebook says it is fully complying with all the current investigations it is facing.

FINSUM: This development might be particularly troublesome for the stock because investors are most familiar with the SEC. Hard to see what might develop here.

(New York)

Losses on Bitcoin and other cryptocurrencies are reaching legendary proportions. Total losses on Bitcoin are now around 70% since its peak last December. The loss brings it close to the 78% decline in the Nasdaq seen during the Dotcom bubble. Many other coins have gone to essentially zero.

FINSUM: The Dotcom bubble is an interesting comparison. The reason why is that though prices were far too high, the market did call correctly that the internet would be hugely disruptive to industry and create very valuable businesses. Will the same happen with crypto, but ten years down the line?

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