Tech and Manufacturing Look Ready to Trade Places

For some time now the conventional investment wisdom has been that the global economy may be at risk of a slowdown, posing a threat to companies dependent on international markets. The major exception, this thinking went, was big technology companies, which have so much going for them that they were immune to any minor bumps in worldwide growth.

But now there's reason to believe both sides of that narrative have changed and that there's cause for optimism for global growth but pessimism for Silicon Valley. If that's right, it will mean some stock-market darlings are about to fall from favor while certain laggards suddenly outperform.

There are a variety of reasons why sentiment on industries tied to global growth could improve. The most significant is that although trade relations between the U.S. and China may not improve, there are no signs of further deterioration. Both countries appear to be signaling that they're trying to reach an agreement. With the U.S. presidential election now only a year away and President Donald Trump's favorability ratings slipping amid impeachment inquiries, he may not be willing to risk further escalation. That could make 2020 the first year since 2017 without trade tensions weighing down global growth.