Displaying items by tag: technology
For years robotics was pigeonholed into major US manufacturing duties but new technology and artificial intelligence are turning that around…see the full story on our partner Magnifi’s site
One of the big questions investors and analysts are still trying to sort out is who are the biggest market winners and losers as a result of the midterms. Here are some insights. The sector which seems likely to gain most is healthcare, as the risk of more regulation looks diminished, and the chances of increased government healthcare spending (as a result of the election of Democrats in key states) seems higher. The sectors which seem likely to lose out are banks and telecoms, both which seem likely to face much greater scrutiny by the now Democrat-led House.
FINSUM: We would also lump big tech into the losers category as increased scrutiny and regulation of the sector is one of the few areas of bipartisan agreement right now.
Tech stocks and large caps have been getting all the headlines this year. There is increasingly a fear that only a handful of high-powered large stocks are driving the market. However, the reality is different, as small caps have been doing great. In fact, small caps have actually outpaced even the tech giants in appreciation this year. That is a very healthy sign for the market as it shows expanding breadth, which is typically a sign of a strong bull market that will continue. According to Bob Doll, famed portfolio manager from Nuveen, “Bull markets eventually end, and typically by the time you get to the peak, breadth is gone … This is a broad market move. It’s a good thing. It’s healthy.”.
FINSUM: We agree that this is very good news for the market. Even better, strong earnings growth has tempered high valuations, making things just a bit more reasonable.
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.
It may have become such a part of your daily routine that you don’t notice it, but new technologies have completely transformed the RIA business. “The revolution in fintech has allowed advisors to now do in minutes what it used to take them all day to do”, says Wealth Management. With all the portfolio management software, robos, and beyond, technology has changed the nature of the business more towards client engagement and offering insights and opinions. One small RIA says new technology means they can grow AUM 10x but only make two new hires.
FINSUM: Technology does seem to have changed the nature of the business by taking out much of the mechanical work. We haven’t seen anybody that is upset with the change.