Recently I was reading stock market commentary at MarketWatch (owned by WSJ) discussing the (relative) fall in Tech stocks and the rise in “Consumer Discretionary” stocks. However, let’s look at the five stocks that comprise the largest movers in the index (which is driven by changes in market cap of its components):
– Amazon – Amazon is generally thought of as a “tech stock” by those in the business of Technology. Amazon Web Services (AWS) generates a rising share of its income and revenues and is the dominant cloud infrastructure provider. I do realize that Amazon has tentacles everywhere and frightens retailers and media companies and grocers and almost every industry it enters (or might possibly enter). But to say that the Tech indexes are relatively underperforming while Consumer Discretionary is over performing is confusing at best
– Netflix – Netflix also straddles sectors but would predominantly be thought of as a tech company. They are certainly bringing a data driven, frictionless experience to media around the world. Once again, saying “tech is down” because “Netflix is up” seems counterintuitive
– Comcast – I would say that Comcast is being valued mostly for its broadband infrastructure, which is primarily a tech play (they aren’t buying it for land line access). Just try to buy Comcast broadband without paying for cable TV…. they are bending over backwards to try to get you to take TV as an add on, while millenials are cutting the cord
There is no “right” answer here, but Tech is driving across stock market sectors and it seems confusing at best and disingenuous at worst to use these vague and (at best) 50/50 categorizations to make investment decisions.