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00:00Welcome to the Equity Market Minute by Bloomberg Intelligence. I'm Gina Martin Adams. Tech stocks have contributed heavily to the equity market gains so far this year, but this group still shows signs of becoming the market's Achilles heel again later in 2023. My first exhibit shows valuations for the TMT space. Certainly the pandemic bubble that developed over the course of 2020 and 2021 has burst and the group now trades at roughly 20 times forward earnings. This is equivalent to 2019 levels, but it's still four handles above the equal weighted S & P 500. As is clear in the exhibit, the two segments TMT and the equally weighted index traded in line with one another for many years prior to 2018. This valuation premium is particularly problematic in an environment where earnings trends are weaker for communications and tech stocks. As this next exhibit shows, communications and tech are showing negative earnings growth on a year ago basis. They are among the weakest earners in the S & P 500 in 2023. Analysts are anticipating a recovery in both groups to emerge as the year progresses. But it will be up to companies to confirm that forecast. Thanks so much for joining me. For the equity market minute by Bloomberg Intelligence.

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Bloomberg Intelligence's 'Equity Market Minute' 2/3/2023

Gina Martin Adams hosts this week's 'Equity Market Minute' by Bloomberg Intelligence. (Source: Bloomberg)