Who knows how this will ultimately play out, but if the high-flying US tech stocks that have done a lot of the heavy lifting in terms of levitating benchmarks in 2017 turn out to be the same names that ultimately catalyze a correction, then no one can say they weren’t warned.
As Barclays wrote a couple of weeks ago, at 47%, the percentage of benchmark gains attributable to the top 10 performing names is a full 17 percentage points above the historical average on years when the S&P is up at least 5%. That right there suggests the situation was tenuous.
We’ve already touched on the tech rout twice this morning, (see here and here), but by way of helping you visualize the knock-on effect, have a look at the fallout in European tech stocks on Monday:
And here’s the MSCI World Info Tech index:
With the Nasdaq down 1% early on Wall Street, you’ve gotta wonder if perhaps the most obvious catalyst for a meaningful drawdown didn’t get lost in the geopolitical shuffle over the past several months…
[Charts: BBG]
