Three factors why Global Technology is poised to regain market leadership – DBS Bank
|Since 12 March, the Nasdaq has outperformed US small caps by 8.9% and this, in the view of economists at DBS Bank, reflects rising moderation in enthusiasm for vaccine-related “reflation trade”; and the rationale are the resurgence of COVID-19 cases, a peakish macro momentum and retracing US Treasury yields.
Retracing bond yields is positive for gold and it is time to take a relook
“Resurgence of COVID-19 cases and slow vaccine rollout: COVID-19 cases are rising while vaccination among developing countries remain slow. A delay in the return to normalcy for businesses will weigh on global growth.”
“Peakish macro momentum: At 64.7, the US ISM Manufacturing Index is looking toppish and a retracement in the index has historically coincided with a moderation in the rally on S&P 500 Index.”
“Retracing UST yields: US Treasury (UST) bond yields are retracing despite strong macro data. This suggests rising caution on this year’s economic growth assumptions.”
“The relative underperformance of Technology is turning the corner and we expect the positive momentum to continue. The virtual and borderless nature of the technology space requires less face-to-face human interactions. A deterioration of the COVID-19 situation will therefore have less negative impact on Technology and we expect the sector to regain cyclical leadership.”
“The retracement in bond yields is positive for the outlook of gold and it is time to have a relook of the precious metal.”
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