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Financials and tech diverge, but not for long, says Goldman

Published 07/24/2017, 12:59 PM
© Reuters.  Financials and tech diverge, but not for long, says Goldman
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  • Returns in tech (NYSEARCA:XLK) and financial (NYSEARCA:XLF) stocks have been highly correlated for years, but they've diverged twice in the last nine months, and the three-month correlation of daily returns in February turned negative for the first time since 2001, according to Goldman Sachs (NYSE:GS).
  • David Kostin and team, however, expect a return to normalcy in H2, with both sectors outperforming - though for different reasons.
  • In tech, it's about robust growth, and in financials it's about a slight boost to growth coupled with boosted capital returns - Goldman expects dividends and buybacks to jump to $132B from $92B.
  • Now read: Earth Central Bankers Are Easy


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