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.
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…