Retailers reported strong numbers on Black Friday, the first official days of the holiday shopping season. E-commerce accounted for a healthy chunk of retail sales, which should have been good news for tech stocks since the existence of e-commerce depends almost entirely on modern digital technology.
Have investors have forgotten about the essential link between e-commerce and digital technology? In their anxiety over future earnings, many investors are making poor choices. Will their momentary panic become a self-fulfilling prophecy? Let's hope not.
The economy itself is strong and tech remains a driving force for growth in markets all over the world. There are signs on the horizon of a slowdown in 2020, yet a major recession appears unlikely.
Long-range forecasts are notoriously inaccurate, and it seems like a waste of energy to fret about events that might or might not happen 12 months down the road.
Here are some predictions for the shorter term:
- The need for cloud storage will accelerate and continue growing.
- Cyber security will remain a major challenge for companies of all sizes.
- The war for talent will make it harder to hire and retain the best employees.
- The shift from traditional IT to IaaS (Infrastructure-as-a-Service) will continue as more companies seek to reduce CapEx (capital expenditures).
- Achieving excellence in IT executive leadership will remain a top priority at forward-thinking organizations.
Even if the market indexes continue drifting downward, tech stocks are unlikely to be the primary cause. The media spent most of last week blaming tech stocks for tanking the market, but on Friday the blame shifted to falling oil prices.
"The S&P 500 just posted the third-worst Thanksgiving week since 1939, when President Franklin D. Roosevelt moved the official celebration," writes Lu Wang of Bloomberg. "The souring mood contrasts with the buoyancy among consumers, whose online shopping over Thanksgiving is forecast to reach a record this year. What's bothering investors is a prevailing fear that things are as good as they can be."
For those of us operating within the tech industry, it seems odd to imagine such pessimism. From our perspective, the future seems bright and full of promise. That doesn't mean there won't be disappointments and bumps in the road. That said, it no longer possible to imagine a world without digital technology.
Technology has become an economic necessity at every level. You simply cannot run any kind of an organization without technology. Soon, the majority of the world's citizens will be digital natives. For them, technology is a basic right, like breathable air and clean drinking water.
I am a realist and not a starry-eyed optimist. I firmly believe we are in the opening innings of a global transformation. We have a long runway ahead of us and technology will continue playing the dominant role in defining our future as a global society.