Semiconductor stocks have lagged the broader stock market’s performance, leading to the reemergence of a technical pattern that preceded the last two market crashes.
Albert Edwards, a notoriously skeptical strategist at Societe Generale, said this has bearish implications for stocks.
The performance of chipmakers is used as a leading indicator because their products are required in the early stages of production for a plethora of tech devices.
The once high-flying semiconductor industry is in trouble.
Like the broader tech sector and overall equity market, semiconductor stocks got slammed from late September through the end of October. But the similarities stop there. The S&P 500 is still green for the year with a 3% gain and the technology sector is down 2% — both faring much better than the Philadelphia Semiconductor Index, which has tanked 13%.
From the end of the cryptocurrency boom to disappointing outlooks and reports of piling inventories, investors have found many reasons to dump semiconductor stocks.
Chipmakers like Nvidia, AMD, and Texas Instruments provide the essential pieces that enable a plethora of devices — including smartphones and video game consoles — to function. Their products are so ubiquitous and in-demand that their stock market …read more
Source:: Businessinsider – Finance