The days of simply investing in technology stocks to beat the market are probably over. The Fed’s aggressive tightening, could erode the attractiveness of stocks, especially growth stocks. As a result, the most damaged sector could be the technology sector, which has raised billions in the years of zero rates.
UNIQUE MOMENTUM IN THE MARKETS
This has led to a great deal of revenue growth, but without seeing an increase in earnings for the stocks that have benefited from this amount of investment. The days of investing in companies with no earnings or multiples of 200 times are probably over. And the rise in Treasury yields, now in the 5 percent area for the first time since 2007, is one more hurdle for techs. I
The current is certainly a moment that is unparalleled in the history of markets, with rising inflation, supply chain bottlenecks, and an ongoing war.
RECESSION ON THE WAY
It is a time for us at 2G Global Markets to be very selective on technology stocks in light of the paradigm shift for markets and economies. Considering that a recession in the U.S. market is both possible and likely, the extent of it is not yet clear.