Yahoo Finance The Zacks Analyst Blog Highlights SPDR S&P Semiconductor ETF, First Trust NASDAQ Technology Dividend Index Fund, Invesco S&P SmallCap Information Technology ETF, Defiance Quantum ETF and First Trust Indxx Metaverse ETF
For Immediate Release
Chicago, IL – January 13, 2023 – Zacks.com announces the list of stocks and ETFs featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. ETFs recently featured in the blog include: SPDR S&P Semiconductor ETF XSD, First Trust NASDAQ Technology Dividend Index Fund TDIV, Invesco S&P SmallCap Information Technology ETF PSCT, Defiance Quantum ETF QTUM and First Trust Indxx Metaverse ETF ARVR.
Here are highlights from Thursday’s Analyst Blog:
3 Reasons Why Tech ETFs May Rebound in 2023
U.S. tech stocks hit rough weather last year as surging inflation weighed on their lofty valuations caused by massive policy easing during the peak of the COVID-19 outbreak. Although tech stocks tried to recoup losses several times, investors remained cautious about betting big on growth stocks.
Rising rate worries dampened the appeal of the stocks that rely on easy borrowing for superior growth. Hence, shares of high-growth technology companies remain in a tight spot. As a result, the largest tech ETF Technology Select Sector SPDR Fund has lost about 30% over the past year (as of Jan 9, 2022).
Now the question is if the sector is able to make a comeback in 2023. Daniel Ives, Wedbush’s well-known tech bull, sees reasons for hope in the tech sector in 2023, as quoted on TipRanks. “In this carnage we see growth opportunities as we believe overall the tech sector will be up roughly 20% in 2023 from current levels with Big Tech, software, and semis leading the charge despite the macro/Fed wild cards,” per Ives.
Slower Rate Hikes in the Coming Days
With the release of some downbeat economic indicators to start New Year, the Fed may slower the rate hike momentum in the coming days. Fed officials raised interest rates by a half-point in December, extending their aggressive tightening campaign and bringing the target on their benchmark rate to a target range of 4.25% to 4.5%.
The policymakers also forecast that their key short-term rate will reach a range of 5% to 5.25% by the end of 2023, before being slashed to 4.1% in 2024. That suggests that the Fed is prepared to hike its benchmark rate by an additional three-quarters of a point and then stay put until the end of 2023. And we can expect a pivot in 2024. This can go in favor of the technology stocks and ETFs after a tough 2022.
Layoffs to Boost Profitability?
Silicon Valley layoffs have been intense. Amazon, Meta, Twitter, Salesforce – most of the tech giants have been on layoff spree. Video-sharing outlet Vimeo said it was axing 11% of its workforce. The digital fashion platform Stitch Fix said it planned to cut 20% of its salaried staff, after having slashed 15% of its salaried staff last year. Such layoffs and cost reduction may boost profitability of the tech companies.
Tech is New Normal
“New normal” trends like work-and-learn-from-home and online shopping, increasing digital payments and the growing video-streaming scenario are sure to stay for long. The growing adoption of cloud computing and the ongoing infusion of AI, machine learning and IoT are the other winning areas. Expanding data centers will continue to bolster the cloud business. Also, strong focus on AI techniques and the home automation space should the technology sector.
Against this backdrop, below we highlight a few tech ETFs that have been in momentum this year (as of Jan 9, 2023) and have a lower P/E than FactSet Segment Average of 28.28X.
ETFs in Focus
SPDR S&P Semiconductor ETF – P/E: 22.78X; YTD Performance: 3.37%
First Trust NASDAQ Technology Dividend Index Fund – P/E: 21.39X; YTD Performance: 3.31%
Invesco S&P SmallCap Information Technology ETF – P/E: 22.70X; YTD Performance: 3.23%
Defiance Quantum ETF – P/E: 24.27X; YTD Performance: 3.11%
First Trust Indxx Metaverse ETF – P/E: 10.68X; YTD Performance: 2.9%
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Get it free >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Invesco S&P SmallCap Information Technology ETF (PSCT): ETF Research Reports
First Trust NASDAQ Technology Dividend ETF (TDIV): ETF Research Reports
SPDR S&P Semiconductor ETF (XSD): ETF Research Reports
First Trust Indxx Metaverse ETF (ARVR): ETF Research Reports
Defiance Quantum ETF (QTUM): ETF Research Reports
