Technology: A Few Hurdles, but Tech Stocks Continue to Run
No attractively priced subsectors, but cybersecurity is a hot topic.
Technology stocks remained on fire in 2019, bouncing back from lows at the start of the year. The Morningstar US Technology Index is up 47% year to date as of Dec. 31, outperforming the U.S. equity market, which rose 31% over 2019 (Exhibit 1). Technology snapped back in early 2019 with some optimism that the U.S. and China can reach trade agreements and avoid a full-blown trade war, an issue that caused the markets and the tech sector to fall in the fourth quarter of 2018. Such concerns reared their ugly heads again in the second quarter of 2019, most notably with the U.S. ban on selling into Huawei, a significant manufacturer of smartphones and network equipment.
After a bounceback in May, tech outperformed the broader market. - source: Morningstar
Brian Colello does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.