Crowded trade, high valuations: why investors worry about tech stocks

  • 📰 ChannelNewsAsia
  • ⏱ Reading Time:
  • 58 sec. here
  • 2 min. at publisher
  • 📊 Qulity Score:
  • News: 26%
  • Publisher: 66%

Some investors are getting increasingly worried about the outlook for technology and big growth stocks after a massive rally which has pushed the ...

Singapore Headlines News

Singapore Latest News, Singapore Headlines

NEW YORK: Some investors are getting increasingly worried about the outlook for technology and big growth stocks after a massive rally which has pushed the Nasdaq Composite index to record highs despite the coronavirus-inflicted economic damage.

"Yesterday was a first warning shot for growth stocks and it might take a few weeks for the trade to come undone. Watch for Nasdaq volatility to be compressed as risk is priced out with common sense," said Sebastien Galy, a senior macro strategist at Nordea Asset Management, referring to a technology sell-off late Monday."The clock is ticking, significant prudence is warranted.

Overall, 74 per cent of global fund managers are long tech stocks, making it the most-crowded trade in the multi-decade history of the Bank of America Merrill Fund Manager survey.Such lopsided trades often result in subsequent underperformance, a Reuters analysis found. The"best short is tech stocks given positioning and stretched performance," analysts at the firm noted in a report.

"California is specifically a tech haven, so this is going to have a disproportionate effect on tech stocks," Campbell says."That is the home of American tech, if that spreads further, if lockdown restrictions get tighter in California, then this will eventually get a knock-on effect on those big tech firms."

We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 6. in SG
 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Bill Gross predicts value outperforms growth, based on rates correlationBillionaire investor Bill Gross is predicting that value stocks like IBM and Altria Group are likely to fare better than growth stocks like ...
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »

Tokyo: Stocks close down on fresh virus worries[TOKYO] Tokyo stocks closed lower Tuesday on profit-taking as sentiment worsened after rallies fizzled on Wall Street due to fresh worries over the coronavirus and renewed US-China tensions. Read more at The Business Times.
Source: BusinessTimes - 🏆 15. / 51 Read more »

Tokyo: Stocks open lower on fresh virus worries[TOKYO] Tokyo stocks opened lower on Tuesday as sentiment worsened after falls on Wall Street due to fresh worries over the coronavirus and renewed US-China tensions. Read more at The Business Times.
Source: BusinessTimes - 🏆 15. / 51 Read more »

Tech stocks push Europe lower after Wall Street tumblesEuropean stocks opened lower on Tuesday, hit by a drop overnight on Wall Street following a flare-up in U.S.-China tensions and new coronavirus ...
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »

Oil prices drop on demand recovery fears amid US virus surgeOil prices fell around 2per cent in early trade on Tuesday on worries that new clampdowns on businesses to stem surging coronavirus cases in ...
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »

From planes to PPE: Abu Dhabi aerospace emblem Strata chases new marketsAerospace supplier Strata Manufacturing, a key player in efforts by oil producer Abu Dhabi to diversify into high-tech manufacturing, is chasing ...
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »