There's still room for rotation into tech, Deutsche Bank says. Here's why
There is still room to run with regards to rotation in tech stocks due to outperformance in the sector, Deutsche Bank said.
TL;DR
- Mega-cap growth and tech stocks have seen a 14% increase since late July, reaching a record high.
- The rest of the S&P 500 has declined by 3% during the same period.
- Deutsche Bank strategists suggest the rotation into tech still has room to grow, as current performance is within the upper half of its long-run trend channel.
- Positioning in mega-cap growth and tech is currently overweight but below previous peaks.
- Options volume has risen sharply in mega-cap growth & tech, followed by consumer and industrial cyclicals, while energy stock volume declined.
- Deutsche Bank views the volume of rates, not their level, as crucial for equities.