“Investors finally woke up to the fact that US corporate demand’s not that strong right now. [Cisco] was that wakeup call.”
– Richard Parower (subscription required), Global Technology Fund Manager, J&W Seligman
The leader of the ferocious rally we saw from the August 16 bottom through October was technology, and especially big, popular technology companies like Google, Apple, Microsoft, Cisco and EMC.
When Cisco warned about US corporate sales Wednesday night, tech companies sold off in a dramatic way we haven’t seen in a long time. It’s been up, up, up for Apple, Google and Co. But not the last two days.
This week, we’ve seen quite an interesting reversal. Financials have actually held up pretty well while tech has led us down (XLK XLF S&P 5 Day Chart).
If tech can’t get its mojo back, what could keep markets going up?
Investors will be wrestling with that question in the days ahead.