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This story was updated from January 9th to include new economic data and additional analyst comments regarding monetary easing.
NEW YORK (
TheStreet) -- Tech stocks such as
Apple(AAPL - Get Report),
IBM(IBM - Get Report) and
VMware(VMW - Get Report) may benefit from the next round of quantitative easing from the
Federal Reserve, speculated to be sometime in 2012, analysts say.
Goldman Sachs chief U.S. economist Jan Hatzius predicts that the Federal Reserve will enact another round of quantitative easing at its next policy meeting, held June 19-20. "Our confidence that the FOMC will ease policy once more at the June 19-20 meeting has also grown," Hatzius wrote in a note released on Monday. "Moreover, both financial conditions and growth have been moving in the wrong direction, to a degree that we think warrants action."
The U.S. dollar has been strong compared to other foreign currencies, such as the Euro or the Japanese Yen, as U.S. economic data has weakened and the crisis in the Eurozone continues to take a turn for the worse. The likes of Apple, IBM, VMware,
Microsoft(MSFT - Get Report) and
Oracle(ORCL - Get Report) may benefit from an additional round of easing because of their heavy exposure to international markets, and converting their overseas earnings back into U.S. dollars would help earnings.
Technology as a sector, measured by the
Technology SPDR ETF(XLK), cumulatively outperformed the
Dow Jones Industrial Average and the
S&P 500 during the previous two periods of quantitative easing. From Nov. 25, 2008 to March 31, 2010 (the time period for the first round of quantitative easing), the Technology SPDR ETF gained 65.6%, the Dow Jones gained 27.7%, and the S&P 500 gained 32.8%.
From Nov. 6, 2010 to June 30, 2011 (the time period for the second round of quantitative easing), the Technology SPDR ETF gained 0.8%, the Dow Jones gained 7.33%, and the S&P 500 gained 10.5%.
Hatzius did not predict the size of another round of easing, but
Bank of America economist Michelle Meyer sees around $800 billion in purchases, combined of mortgage-backed securities and U.S. Treasuries. During the first round of quantitative easing, the Fed purchased $1.75 trillion worth of mortgage-backed securities, government-sponsored entity (Fannie Mae and Freddie Mac) debt and U.S. Treasuries. In the second round, the Reserve purchased $600 billion worth of U.S. Treasuries.
Hatzius's comments come amid recent slowdown in economic growth, most notably the recent
May employment report". The economy added just 69,000 jobs during the month of May, with the unemployment rate ticking up to 8.2%. The numbers of jobs created during March and April were revised significantly lower.
Read on for more details on
which tech companies could benefit from QE3, if it happens: