Share Performance in Jun 21

Any fears that tech was in for a ‘correction’ certainly did not come to pass in June 21. NASDAQ had a stonkingly good month – rising another 5.1% making it a 12.7% gain in 2021 YTD. This compared to a flat-lining FTSE100 (up 8.9% YTD)  

It wasn’t quite so good for tech here in the UK with Techmark 100 flat-lining (up 8.2% YTD) and the FTSE IT index up 4.7% (14.2% YTD).

The FTSE Software and Computer Services Index was up 4.4% in June. But YTD is up 14.6% - outpacing NASDAQ (up 12.7% YTD)

Outlook

There is a general feeling of optimism that the US and UK are emerging out of the darkness of C-19. These are countries where a majority of citizens have been vaccinated. The attitude now is that we will have to learn to live with C-19 in much the same way as we ‘live’ with diseases like flu that also cause significant numbers of deaths each year. But this is not the situation in many other parts of the world which remain unvaccinated.

Tech has had a pretty good run. Indeed 2020 was a vintage year as tech emerged as one of the big winners from the pandemic. This upbeat situation has continued into 2021. Throughout that whole 18 months, pundits have been warning of a ‘correction’ which has never come.

The real threat now is from INFLATION. If interest rates rise as a result, investors might move away from high risk tech stocks. Indeed consumer confidence would be knocked again if mortgage interest rates rose, affecting consumer tech sales. But in the enterprise tech world, companies have to up their digital transformation plans which continues to bode well for the tech companies supplying that sector of the market.

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Posted by Richard Holway at '09:33'