Displaying items by tag: tech
Two extreme water crises have occurred since the new year and are moving water conservation to the top of the ESG pecking order…see the full story on our partner Magnifi’s site
Those with a lot of money in tech stocks may be starting to breathe a sigh of relief. After a rough period to start the year. The last few weeks has been quite positive for tech, so the worst may be behind us, right? The answer is that it may not be, according to some analysts. There are two huge trends (and one macro factor) that look likely to weigh on the sector for the next year. Firstly, three of the very largest stocks—Facebook, Apple, and Google, have gotten to the point in size where their growth is going to start inevitably slowing, which means the narrative around them will change. Additionally, the success of the vaccine rollout is increasingly, which means a reversal to pre-COVID norms seems likely. Tech stocks are also quite rate sensitive, which gives them a lot of “Fed risk”.
FINSUM: While it is hard to argue with the interest rate risk, we cannot get on board with the other two narratives. Everyone knows FAANG stocks are huge, the growth story is no secret. More generally though, we just don’t buy into the narrative that these stocks will suffer from the “reopening”. Consumer habits in many areas (e.g. grocery shopping and increased food delivery) have changed and that will continue to allow big tech stocks to grab market share and grow. Just ask your grown children and friends how they feel about going back to the grocery store….
Chinese technology and financial regulation have been on the rise. And big tech companies such as…see the full story on our partner Magnifi’s site
The infrastructure bill is not only making waves in Washington, but also on stock exchanges. The bill is going to send many stocks surging, but here are six names that look likely to do very well if the current plan passes, with a particular focus on semiconductors. One little known detail is that the Biden plan earmarks $50 bn for the US semiconductor industry and an extra ~$175 bn for electric vehicles, which will also help semiconductors. Accordingly, check out these stocks, all of which seem like good candidates for appreciation: Vishay Intertechnology (VSH), Applied Materials (AMAT), Macom Technology Solutions Holdings (MTSI), Micron Technology (MU), Analog Devices (ADI), Maxim Integrated (MXIM).
FINSUM: The semiconductor industry has been lobbying for this to help increase its eroding market share versus China and it seems like the Biden plan will deliver.
Any advisor reading ESG headlines over the last year will have seen some big numbers coming out of the sector (e.g. ESG sees $x trillion of asset flows). One such headline recently was “one third of U.S.-domiciled, professionally managed assets addressed ESG considerations as of the end of 2019”. The report, from US SIF Foundation, claimed that $17.1 tn was parked in sustainable investing strategies. However, this can be highly misleading. The reason why is the criteria for what can be considered “ESG” is quite broad. While the US SIF report did have some rigor in defining ESG, the way it conducted its study meant that any managers taking into account any number of considerations that could theoretically be considered related to ESG, were called “ESG” assets.
FINSUM: ESG is growing nicely, but there does seem to be a lot of “fudge” in the asset reporting. Part of this likely comes down to what we might call “de facto” ESG. In other words, a lot of ESG funds are dominated by tech stocks/assets. Many of these inflows have little to do with ESG imperatives (they are more pure return-driven), but can nonetheless be referred to as “ESG” since they are technically environmentally-friendly.