Technology loses momentum and stock portfolio becomes more dependent on corporate bonds
According to MarketWatch, the wear on technology stocks comes on top of a pressured corporate bond market and the weight of midterm elections.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM MARKETWATCH · 2 MIN
The American stock exchange today asks for a reading that goes beyond company balance sheets. According to MarketWatch, the stock portfolio increasingly depends on the corporate bond market, and the midterm elections are a factor to watch.
The technology sector is the first warning sign. According to MarketWatch, the group's shares “caught a cold” at the end of October, an expression used to describe a moment of fragility in shares.
This cold, according to the same report, has been disrupting the corporate bond market for months, where companies raise funds by issuing debt to investors. In other words, weakness also appears on the debt side, which draws the attention of those who follow the stock market and fixed income together.
It is on this interdependence that the text focuses its thesis. MarketWatch maintains that the stock portfolio increasingly depends on the bond market, so that the cost and availability of credit for companies begins to influence the behavior of shares on the stock exchange more strongly.
The report also associates this scenario with mid-term elections, which appear in the title as a variable to monitor. For the investor, the combination of technology, corporate credit and electoral calendar increases the number of points of attention when assessing risks.
According to those who defend fiscal responsibility and a predictable business environment, confidence in the cost of money and the rules of the game is usually what sustains company financing. Therefore, the topic is of interest to both those who trade shares and those who monitor corporate debt.
What changes for the investor
If the stock exchange starts to respond more to the bond market, the reading of interest rates and corporate credit will gain weight alongside the quarterly results. Those who follow the Nasdaq, the dollar and the interest rate curve may notice that news about corporate debt and the electoral calendar are starting to change the mood of the trading session more frequently. This is a possible effect, not a prediction: the report does not provide price projections, and this article is not a recommendation to buy or sell.
Automatically translated from Portuguese.
