Al-Ittihad – Corona’s disasters benefit the technology companies


Technology stocks made gains even before the Covid-19 outbreak, but behavioral shifts during the outbreak of the epidemic raised the sector’s level to upper limits, leaving the broader stock market panting behind.
The technology-dominated “Nasdaq” index hit record highs at close in six of its last seven sessions, reflecting investor confidence that technology companies are taking advantage of “home commitment” rules that have been a hit for airlines, hotels and stores.
“There are clear winners and losers on the market today,” said Dan Ives, an analyst at Wedbush Securities, who believes that major technology companies can still make an additional 30 percent gain this year.
“From the winners’ point of view, there is a clear light shining on names in the technology sector.”
Quincy Crosby, chief technology strategist at Prudential Financial, said technology companies are “a certainty of certainty” in a period of economic weakness.
The recent rise means that only five companies within what has become known as the “Fang” group, which is an abbreviation of “Facebook, Apple, Amazon, Netflix and Google”, constitute more than 20 percent of the value of the S&P 500 index.
While the rise in the number of new HIV infections in the United States appears to have been a driver of the recent rise, policy is probably the industry’s biggest concern, according to analysts.
The chief executives of “Apple, Google, Facebook and Amazon” are due to appear on Capitol Hill on July 27 in a hearing on antitrust issues, potentially raising concerns that governments’ interests could bypass only make political noise.
“July 27 is an important day to see whether it will be a political occasion to call attention or just the beginning of a much broader move regarding the dismantling of these companies,” Eves said.
Crosby agrees that politics remains an unpredictable factor. And if Democratic candidate Joe Biden wins the US presidential election in November, this could increase the chances of Washington taking more tough steps.
It is expected that the major technology companies will be in a good position during the next revenue announcement period, which begins this week.
While revenues from airlines and marine tourism have fallen by 90 percent or more during periods of the second quarter of the year, technology giants such as Amazon and Netflix are expected to achieve gains of more than 20 percent, according to Wall Street analysts.
The co-founder of “Cumberland Advisors” David Kotok notes that the rise of NASDAQ indicators also reflects the gains made by biotechnology companies that are developing vaccines and treatments for Covid-19.


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