Equity Index Update - Thursday 27 April
Microsoft and Meta Platforms Provide Reasons To Be Cheerful
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Tech vs. GDP
Data released in the last two days tells you why tech is such a wonderful sector in which to invest long term, and that is secular rates of growth. US GDP is growing at around +1% right now, but one of the very largest most mature most utility-like tech companies, Microsoft, is growing at +7%. A recovering casualty, Meta Platforms, whose growth is almost entirely dependent on the ad sector (in an economy growing at +1%), is growing at +3%. This in short is why tech outperforms over the long term.
Now, the earnings from these behemoths has supported equity indices more effectively than we might have expected given the extended nature of the Nasdaq and the S&P on a technical basis. It's possible we see each index launch upwards from here, but we still expect a corrective move to shed some of the gains clocked up since the October lows. There's always a correction, and just when you think there's not going to be a correction? Here comes the correction to punch you in the face.
And with that, onto our usual charts.
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