(New York)

A lot of worries have been centered on the tech sector. While many are upset about the losses currently being felt, and even bigger fear is that tech might drag down the whole market. Well, Goldman Sachs says investors shouldn’t be too worried about that. The reason why is that while tech makes up a large part of the market’s current capitalization, earnings growth forecasts are much more broad-based, which will limit the fallout to the market as a whole. Goldman summarized their view this way, saying “From a fundamental perspective, narrow market leadership typically reflects narrow earnings strength, which is often a symptom of a weakening operating environment … Unlike past episodes of narrow market breadth, the earnings environment today appears healthy and broad-based”.

FINSUM: Goldman points out what should be a nice buffer, but we are more worried about the emotional, rather than rational, reaction of investors to falls in tech. That said, broad-based earnings strength is a good support.