But not everyone wants to stay on the racecourse. Tony Dwyer, a longtime bull and strategist at brokerage Canaccord Genuity, is getting a little nervous and said it is time “to take offense temporarily off the field.”
The market—and the information technology sector in particular—“have reached a point that warrants a change in view.” The S&P 500 IT sector
has reached what he calls a “historically extreme level” for only the fifth time since 1990.
“This really isn’t that complicated a call—info tech has led the market to a position that is excessive and has generated temporary pullbacks in the past,” he said in the call of the day.
Dwyer added the firm’s bullish case last year—more or less, to ignore the trade war because of the Federal Reserve’s dovish pivot, low inflation and solid U.S. economic growth—is now consensus. “These positive influences remain in place but are now considered likely by most, and have already been discounted over the near term given the upside. We will look to rotate more offensively again on any meaningful pullback in the market as long as our positive fundamental core thesis remains in place,” he said.
Among companies that reported after the close on Tuesday, IBM
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