Marketbites: Meta Leads Tech Sector Higher
Portfolio Manager Commentary:
The S&P 500 rose to its highest level in five months on Thursday as better-than-expected Meta results further improved sentiment around technology shares, which led the market lower last year. At the same time, the Dow Jones average underperformed, falling 0.11%. The major index was dragged lower by Merck shares after the pharmaceutical firm issued a weak outlook in its latest earnings results.
Tech stocks have outperformed in 2023, buoyed by recent signals of cooling inflation that investors expect could lead to a pause from the Fed in its aggressive rate hiking campaign. The S&P 500 information technology sector is up more than 14% this year after a decline of more than 28% last year. Investors will be keeping a close eye on jobs data coming out later today. A high increase in payrolls could signal that the Fed has further to go to cool the economy and curb inflation.
Chart of the Day:
Companies say that they are no longer scrambling to retain workers, after several years of doing whatever it took to keep people on staff. Executives are seizing on this moment to streamline operations or cut projects, shedding staff that until recently they couldn’t afford to lose. A wave of corporate layoffs that began in technology is now flowing through other industries. In recent weeks, employers in various industries such as toy maker Hasbro Inc., chemicals giant Dow Inc., and payments pioneer PayPal Holdings Inc. also announced job cuts. As a result of the trend there is a shift in sentiment, executives and their advisers say. Employers who felt they had less leverage in the tight labor market of the past couple of years say they have more power in negotiations with employees.
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