Tech has been the undisputed leader of the rally over the last several months, but there might be cracks in its armor that investors need to be aware of. Internal price momentum has started to fade in the sector, and it looks as though it might be ready to hand over leadership of the market. According to one equity analyst, “Relative performance has diverged on the sector’s new high, while semiconductors and small caps have failed to confirm as well”.
FINSUM: No one wants to hear this, but with valuations so high, it might well be true. The other big risk is regulation, but given good business momentum in the sector, there could still be some room to run.