A just-published report from MRB examined a range of topical investment issues covering a wide range of global asset markets, particularly the spreading bond bear market, which we have been anticipating. In addition, the report delved into the outlook for U.S. tech stocks, which have been star performers for over a decade.
After a huge run-up in 2020, the overall U.S. tech sector and each of its sub-groups faces a challenging road ahead. While demand conditions will remain robust, the combination of rising bond yields, softening relative earnings, and elevated relative valuations will result in bumpier ride for relative share prices in the coming year. On a 6-12 month horizon, we remain of the view that other sectors such as financials, energy, and health care stocks will offer better opportunities for outperformance.