Nasdaq braces for nervy fortnight as investors fall out of love with tech

Nov 28, 2010
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So says this headline. But why tch stocks in particular?

Nasdaq braces for nervy fortnight as investors fall out of love with tech​

ech stocks have been nursing a new year hangover, pushing the Nasdaq into correction territory. Momentum is building against companies with exciting promises to reshape the world, as investors turn to “value” alternatives such as oil and banking.

The tech sector now faces a crunch fortnight as its biggest names report results, including Microsoft on Tuesday, Tesla on Wednesday and Apple on Thursday. They must prove they can thrive in a post-lockdown world where the cost-of-living squeeze is leaving people with less money for tech products and services.



“The outlook for the Nasdaq 100 will be much clearer in two weeks,” says Matt Weller, global head of research at Forex.com and City Index. Soft earnings reports or weak guidance could see the index make one of its worst starts in over a decade.

Although a hesitant return to normal life has now been jolted by Omicron, smaller growth stocks such as the pandemic winners Peloton and Zoom have been under pressure for months. A near-record number of tech stocks have recently plunged at least 50% from their all-time highs.

The technology giants’ shares have had an incredible run, helping the S&P 500’s IT index to deliver blockbuster returns of 33% in 2021. But the sector lost about 10% in January.

Anxiety over US interest rate rises hurts the unprofitable tech firms promising big earnings in the future. The Federal Reserve, which meets this week, is likely to raise rates several times this year to tame US inflation, now at its highest since 1982.

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DavidHawk324

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I don’t think its all tech stocks, but it mostly comes down to valuation, in my opinion. Just look at some of the valuations on “tech” companies that don’t make money and they have been insane.

Just a few where the stocks have collapsed lately, Rivian is an EV company that had barely sold a single car and had a valuation above $100B. Peleton makes stationary exercise bikes and had a valuation around $50B. People were just gambling with the stocks of some of these, I can’t imagine they thought the businesses were actually worth that much.

That said, almost everything is down lately. I own bank shares and those are down as well.