US stock has seen a rapid rise and is expected to rise further mainly due to the technology shares. The top tech companies hold the most market value and few are looking for the next rally leader.
Alphabet, Apple, Facebook and Microsoft have raised the bar of the technology sector of S&P 500. In 2017 this sector has risen by 20 percent.
Amazon is the only company that has comparatively obtained certain gains in market value. As per a senior portfolio manager at Synovus Trust Company in Atlanta Daniel Morgan these companies dominate the market. People will continue to invest in these tech tycoons as people want to flood money in already established companies.
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As per BofA/Merrill Lynch data, those leaders that have a huge success record in technology area are being given more money.
A little point of alarm is that more than one third of 2017 market gain in S&P 500 was concentrated in five big companies. This has created nervousness and raised question in mind of some of the investors.
Jim Tierney, chief investment officer of concentrated US growth at Alliance Bernstein in New York said that it is time that some other group should produce leadership. The five leaders ruling the market currently have brought profit of $612 billion in the stock market. 85smallest companies of the S&P 500 can be easily bought through this gain.
Rise in US stock because of technology shares has also created expectations of more profit. For one dollar presently investors are paying $18.50, which is expected for next twelve months in technology sector.
Also Thomson Reuters I/B/E/S data reveal that earnings would rise by 11% in technology department in the second quarter of year. 21% rise in first quarter and expected 11% rise in second quarter gives an indication of gains in this sector.
Statistically 33% gain were for Apple, Facebook and Amazon, 15 percent for Microsoft and 25 percent for Alphabet. This leaves little room for any other company.
Now as per Alan Gayle, director of asset allocation at Ridge Worth Investments in Atlanta the country has too much focus in field of technology and we won’t be a part of it for long. He said that a little respite should be given to tech field and improvement should be made in other critical areas. Investment in healthcare can be an option now.