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The New York Times made some serious allegations against Facebook management Thursday and this is right on the heels of Apple Inc. stock taking a sizeable beating on signs of sluggish global iPhone sales.

Overall, there’s a feeling in technology that the novelty has worn off, and the innovations that have driven market outperformance in the sector over the past decade are tired and worn out.

I clearly remember staring at Steve Jobs’ demonstration of the first iPhone in slack-jawed awe. After avoiding Twitter because I thought it was mainly celebrities taking pictures of their lunch, I became immersed in the financial sections of the site until it became invaluable. Netflix, too, was a revelation at first.

My current iPhone 6 does everything I need but will break eventually, and the costs of upgrading in Canadian dollars has become ridiculous. Trolls and ideologues who perfectly follow the Churchillian definition of ‘can’t change their minds and won’t change the subject’ have soured the social media experience. Netflix is still useful but faces increasing competition – Walt Disney Co. is about to enter the fray – and a future where total subscription costs are more than monthly cable bills beckons.

I am not, at all, suggesting that technological progress has slowed. A Merrill Lynch research report published this week predicted “the fastest global transformation in history” in the next five years as a result of new technology and I wouldn’t bet against it.

The investment trends, I think, will change. The recent emphasis has been on connectivity (social media), consumption (online shopping) and entertainment (gaming). The projected move in focus to artificial intelligence and health care technology are more productivity and efficiency oriented, and improving wage growth will only increase demand for cost-saving tech.

The shift may already be evident within one company, Amazon.com. The world’s dominant online shopping venue now generates a big chunk of its operating profits from the Amazon Web Services (AWS) division which facilitates cloud computing.

Admittedly a lot of this is a broad feeling. The Apple news and the intensifying scrutiny on Facebook, however, are concrete evidence that there are technology trends that seem to be reaching exhaustion. If so, significant market upheaval is likely in the near future. The most recent Merrill Lynch survey of global fund managers found that FAANG stocks were the ‘most crowded trade’ according to institutional investors.

Progress won’t stop, but investors should be paying close attention for changes in leadership within the sector.

-- Scott Barlow, Globe and Mail market strategist

This is the Globe Investor newsletter, published three times each week. If someone has forwarded this e-mail newsletter to you, you can sign up for Globe Investor and all Globe newsletters here.

Stocks to ponder

Canada Goose Holdings Inc. (GOOS-T). This stock appears on the positive breakouts list (stocks with positive price momentum). On Wednesday, the company reported better-than-expected quarterly financial results and management raised their guidance. As a result, 10 analysts increased their target prices and the share price soared 10 per cent on high volume. Year-to-date, this is the number one performing stock in the S&P/TSX composite index given the company’s strong growth profile. Toronto-based Canada Goose is a designer, manufacturer and distributor of premium-priced clothing, selling its products worldwide. Jennifer Dowty reports (for subscribers).

The Rundown

The return to economic normalcy: Are we there yet?

Economic conditions are beginning to look more normal than they have in years – but that doesn’t mean investors should be complacent. Just the opposite, in fact. After a decade of being supported by some of the lowest interest rates in recorded history, stock prices are now facing headwinds as borrowing costs ratchet back to more customary levels. The inevitable result is volatility. Whether the topic is General Electric’s future or the embattled tech sector, investors are redoing their calculations of value based on the assumption that interest rates in North America have nowhere to go but up. For anyone who owns stocks, the trend toward what central bankers call rate “normalization” raises a horde of interesting questions. For starters, just how close are we to normal anyway? How much longer are the rate hikes likely to continue? And who is going to feel the pain the most? Ian McGugan takes a look (for subscribers).

Why these five companies just gave dividend investors an early holiday gift

Christmas has come early for dividend investors. As third-quarter earnings rolled in, many companies – including several in John Heinzl’s model Yield Hog Dividend Growth Portfolio – have taken the opportunity to hike their payments to shareholders. He welcomes these “gifts," not only because they put more cash in his pocket but because they send a strong signal about a company’s financial health. He looks at five companies that increased their dividends in recent weeks. For subscribers.

Three top stock picks from three of Canada’s top money managers

David Milstead looks at the top stock picks from three top money managers presenting at this year’s Capitalize for Kids charitable investment conference: Kim Shannon of Sionna Investment Managers, Ryan Marr of Waypoint Investment Partners, and Colin Stewart of J.C. Clark. (For subscribers).

Brace yourself: Your bond fund returns are going to look bad for 2018

Brace yourself when you open your next account statement if you own bond funds of any type. The numbers will look bad. Rob Carrick uses a Globeinvestor.com Watchlist to keep a list of the bond exchange-traded funds in the latest ETF Buyer’s Guide. Twelve bond funds are included and all of them were down 2.1 to 4.3 per cent on a trailing 12-month basis as of mid-November. These numbers are not as bad as they seem. As is often the case when you get a stock quote for an ETF, they reflect simply the share price of the fund and not the total return with bond interest or dividends included. On a total return basis, bond funds are down only a bit on a year-to-date basis. Rob Carrick reports (for subscribers).

CIBC becomes the last of the major banks to launch its own ETFs

Canadian Imperial Bank of Commerce is the last major bank to enter the exchange-traded funds industry with plans to launch four new offerings. Clare O’Hara reports.

Others (for subscribers)

For investors, it’s ‘The End of Easy’

Top stock picks to benefit from ‘fastest global transformation in history’ in next five years

Thursday’s analyst upgrades and downgrades

Thursday’s Insider Report: CEO trades over $16-million worth in this blue-chip stock

Wednesday’s analyst upgrades and downgrades

From junk to investment-grade: Why investors should be watching these five companies

U.S. corporate bonds are the most dangerous part of the market, DoubleLine’s Gundlach says

Stock-picking strategy shakes out value-oriented names on the TSX

Big-name investors favour U.S. equities over rest of world

Others (for everyone)

Bitcoin extends losses, drops to lowest in more than a year

Berkshire Hathaway invests in JPMorgan, Oracle as Buffett puts cash to work

Ask Globe Investor

Question: I’d like to trigger capital loss for tax purposes on a Canadian index exchange-traded fund that I own. Can I immediately purchase another Canadian index ETF without triggering the superficial loss rule and having the loss denied, or do I have to wait 30 days?

Answer: With the S&P/TSX composite index down about 6 per cent year to date, this is a question that’s probably on a lot of investors’ minds.

According to the Canada Revenue Agency, a superficial loss occurs when you sell a capital property for a loss and then you (or your spouse or company controlled by you or your spouse) buys “the same or identical property … during the period starting 30 calendar days before the sale and ending 30 calendar days after the sale.”

So, it’s clear that you couldn’t, for example, sell 100 shares of Bank of Montreal and then immediately repurchase 100 shares of Bank of Montreal. In that case, the loss would be denied for tax purposes. Nor could you sell an ETF that invests in the S&P/TSX composite index – such as the iShares Core S&P/TSX Capped Composite Index ETF (XIC) – and immediately buy another ETF that holds the same index – such as the BMO S&P/TSX Capped Composite Index ETF (ZCN). These are effectively identical properties in the eyes of the CRA.

Now for the good news. You could sell a Canadian ETF that invests in one index and immediately replace it with another ETF that invests in a similar, but not identical index, and still claim the loss. If you are selling XIC or ZCN, for example, you could purchase the Vanguard FTSE Canada All Cap Index ETF (VCN), which invests – as the name implies – in the FTSE Canada All Cap Index. Because the S&P/TSX composite and FTSE Canada indexes hold many of the same stocks and are highly correlated, you will remain invested in the broad Canadian market but will still be able to claim a capital loss.

--John Heinzl

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What’s up in the days ahead

This weekend, look for Rob Carrick’s annual robo-adviser guide. Fees are coming down and there are more options than ever before.

Click here to see the Globe Investor earnings and economic news calendar.

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Compiled by Gillian Livingston

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