A week ago, heavily weighted tech stocks were taken to the woodshed. By far the most important market observation we could have is to see how they’ve recovered. If they don’t recover, there is little hope for the market to get a sustained leg up through the summer.
This brings us to Friday's widely-publicized "Tech Wreck." Ahead of the weekend, the massive, former market-leading FAAMG stocks (Facebook, Apple, Amazon, Microsoft and Google) led a big reversal in U.S. tech stocks. As of writing, each of those stocks is trading off over 5% from their intraday highs, and the NAsdaq 100 index of technology stocks is trading off by over 4% as a result.
Microsoft said on Tuesday that Britain should stay in the European Union if it wanted to receive more investment, the same day the Confederation of British Industry urged firms to discuss the vote with staff. The U.S. software giant employs 5,000 staff in Britain and plans to offer Europeans remote access to data from centers based in Britain, but said further investment could be at risk if Britain votes to leave the EU in next month's referendum.
Wall Street surged over 2 % on Friday after the Bank of Japan unexpectedly cut interest rates and Microsoft led a major rally in technology shares, repairing some of the damage to the S&P 500's worst January since 2009.