A Bit Weird
Wednesday, June 21st, 2017 Categories: Energy Prices, Sector Strategy, Technology
The Curious Link between Energy and Tech
The fate of the US Energy and Technology sectors may be linked together thanks to the simple mechanics of portfolio construction. Our data suggest that investors may be herded into two large positions relative to the benchmark: a big overweight in Tech and a big underweight in Energy. It will be difficult to reduce one without reducing the other. So a bout of profit-taking in Tech may lead to a bounce in the Energy sector. More importantly, a bounce in the oil price could cause the Tech sector to underperform.