Strong earnings propelled the major indices up this week, contradicting the views of economists and analysts who foresaw a weakening economy ahead. As of yesterday, the optimists were right and the pessimists were wrong.
I see this as part of a much larger overall cycle in which technology continues to drive and energize the global economy. Tech stocks represent roughly 26 percent of the S&P 500, which largely explains their influence on the wider market.
But you don’t need to be a Wall Street analyst to understand why tech is fueling one of the largest economic expansions in recording history. The basic underlying reason is extremely straightforward: Everyone uses tech. We use tech at work, at play, at home and while traveling. Tech has become a standard part of our daily lives.
Moreover, since virtually every piece of technology is continually improved and upgraded, we’re constantly purchasing the newest versions of our favorite digital tools and devices. The constant refresh of tech is what’s driving the economy.
As I’ve said and written before, now is the absolutely best time to be a technology leader. Our field is growing with a dynamism that is virtually unmatched by other sectors of the economy. I predict that tech will continue leading the broader economy to new heights. So far, the market seems to agree.
“U.S. stocks were mostly higher on the heels of stronger-than-expected earnings results from several major companies Tuesday morning and an announced bipartisan agreement over the debt ceiling. Overseas, European equity markets climbed after Boris Johnson clinched the vote to become Britain’s new prime minister,” writes Emily McCormick of Yahoo Finance. “Shares of Coca-Cola (KO) and United Technologies (UTX) climbed after the companies topped Wall Street’s quarterly earnings expectations.”
It’s natural for investors to be wary of too much good news, but I have confidence in the markets. If we are in a bubble, the bubble is still expanding. I frankly doubt that even the trade war will derail this period of economic expansion.
“While they may be confident in a deal to suspend the U.S. debt ceiling and boost spending levels, investors are searching corporate earnings for signs of whether trade tensions are affecting profits. In the meantime, the U.S. and China are moving closer to resuming face-to-face trade talks,” write Vildana Hajric and Olivia Rinaldi of Bloomberg Business.
From my perspective, the future still looks very bright. Let’s enjoy this moment, and take pride in the role we play as technology leaders in growing our truly amazing global economy.