Wall Street has been on choppy ride since the start of 2022 due to rising rate worries. Higher inflationary expectations emanating from supply chain disruptions as well as higher crude prices should make Fed members comfortable with several rate hikes in the coming days with the first one since 2018 likely to hit the market in March.
The Nasdaq, heavy on technology and growth stocks, has been extremely hit due to this trend. The index had already entered the correction territory in January. The Nasdaq Composite has lost 7.8% this year as investors continue to walk out of the high-growth tech shares as interest rates surge to start the new year (read: Nasdaq ETFs to Log Worst Month Since 2008? 5 Stocks Up 20%+).
Heavy reliance on the tech sector led to this lackluster performance. No wonder, Technology Select Sector SPDR Fund (XLK – Free Report) has lost about 8.6% in the year-to-date frame. But this does not mean that the entire sector is in the lackluster shape. In fact, the latest dip can be used to buy some hidden gems.
Against this backdrop, below we highlight a few tech ETF spaces that should bought or sold right now.
Per the Semiconductor Industry Association, global sales of semiconductors totaled $144.8 billion during the third quarter of 2021, marked an increase of 27.6% over the third quarter of 2020 and 7.4% from the second quarter of 2021. Although the industry is grappling with a chip crunch, the ever-increasing demand is a plus for the space.
“Semiconductor shipments reached all-time highs in the third quarter of 2021, demonstrating both the ongoing high global demand for chips and the industry’s extraordinary efforts to ramp up production to meet that demand,” said John Neuffer, SIA president and CEO. The latest upbeat earnings from Nvidia (NVDA – Free Report) and Advanced Micro Devices (AMD – Free Report) also points to the industry’s wellbeing.
Dynamic Semiconductors Invesco ETF (PSI – Free Report) and Vaneck Semiconductor ETF (SMH – Free Report) are two choices out of many that could be …….