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IT Index

Overview

The martinwolf IT Index (Global Edition) is a report of our proprietary analysis using securities that are weighted according to the market value of their outstanding shares. The global edition of our Index combines our U.S., India and China editions, tracking companies and comparing them to public stock exchanges.


Topline Analysis
 

The 2016 election was a turning point for the US economy, with an immediate and significant effect on major markets across industry sectors. The conclusion of a volatile presidential election—and the election of a candidate perceived as more business and growth-oriented—sent waves across the world, ushering in a robust stock performance and further strengthening the dollar. Major indices closed 2016 at or near record heights, which carried over into 2017, with the Dow easily passing 20,000 on January 25 and the more technology-centric Nasdaq hitting 5,600 (compared with its 2016 start of 4,591). The various components of the martinwolf IT Index echoed this optimism—the Software and SaaS Indices grew 18.15 percent and 21.28 percent from their starting points, while the more mature IT Supply Chain Index and IT Services Index grew 21 percent and 13.26 percent, respectively.

Post-election optimism has continued to buoy the markets in the new year, with the new administration and GOP-led Congress aggressively pledging to back domestic business interests through corporate tax reform and regulatory rollbacks. Promising statistics continue to support this mindset—the unemployment rate dropped to 4.7 percent for the month of February with growth in wages and consumption, and GDP growth continued to hold steady around 2 percent. Earnings too are reflecting the heath of the economy—the estimated earnings growth rate for the S&P 500 is 9.1 percent for the first quarter, which would be the highest year-over-year earnings growth since the fourth quarter of 2011 at 11.6 percent.

In particular, the technology sector solidified its status as the crown jewel of investors with growth of 10.8 percent on 7 percent higher revenues in the first quarter, which is higher than any other sector.

In the Q1 2017 IT Index, we explore how current economic conditions affect each of the core segments tracked in the martinwolf  IT Index: IT Services & BPO, IT Supply Chain, Software and SaaS. We also look at the Chinese and Indian IT Services markets.

View the entire Index here.

Description and Formula

The martinwolf IT Index is a market-value-weighted index. The representation of each security in the index is proportional to its last sales price times the total number of shares outstanding, relative to the total market value of the respective index.

Adjustments for securities being added to or deleted from the index, or capitalization changes, are made periodically. Stock splits and stock dividends are likewise adjusted for during the process. In the case of cash dividends, no adjustment is made.