....However, this does not go well with the technology stocks as the sector enjoys several tax benefits and therefore has lower effective tax rate. Citing the S&P Global data, Bloomberg stated, “Among sectors, the 18.5 percent effective tax rate enjoyed by the group is the third-lowest among U.S. large caps.”
Analysts believe immediate beneficiaries of the recent tax reforms will be companies across sectors like finance, telecom, consumer discretionary and industrials which fall under the high tax bracket.In such a scenario, investors are likely to move their funds into sectors that will gain the most due to the latest tax reform. In fact, the process has already started, as reflected by the 2% decline in the Technology Select Sector SPDR ETF value over the last two trading days.Although tech heavyweights, including Apple, Microsoft, Facebook and Alphabet, witnessed fall on Friday’s tax cut news, semiconductor stocks have been affected the most.In the semiconductor space, some prominent stocks like Advanced Micro Devices, NVIDIA Corp. and Micron Technology, Inc. have plunged nearly 7.9%, 7% and 5.9%, ....
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