The Tech Wreck Is Likely Over: Higher Prices Should Be Ahead

seekingalpha07-29

Recent market volatility led to a 5% pullback in the S&P 500, with some high quality tech stocks declining by 20-30% or more.Despite near-term volatility, the market's intermediate and longer-term ...

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martinho
·07-30
Fake news. It will only spiral down
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href=https://seekingalpha.com/article/4707688-the-tech-wreck-is-likely-over-higher-prices-should-be-ahead><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Recent market volatility led to a 5% pullback in the S&P 500, with some high quality tech stocks declining by 20-30% or more.Despite near-term volatility, the market's intermediate and longer-term ...</p>\n\n<a href=\"https://seekingalpha.com/article/4707688-the-tech-wreck-is-likely-over-higher-prices-should-be-ahead\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4566","symbol_name":"资本集团","start_time":0,"source_url":"https://seekingalpha.com/article/4707688-the-tech-wreck-is-likely-over-higher-prices-should-be-ahead","article_id":"2455963666","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1391973547/image_1391973547.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2455963666","pubTimestamp":1722268573,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Is the pullback over already?Or is there more pain ahead?","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4566":"资本集团","LU0792757196.USD":"TEMPLETON SHARIAH GLOBAL EQUITY FUND \"A\" (USD) ACC","SOUN":"SoundHound AI Inc","QQQ":"纳指100ETF","LU1551013342.USD":"Allianz Income and Growth Cl 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(USD) ACC","BK4567":"ESG概念","LU2458330243.SGD":"FRANKLIN SHARIAH TECHNOLOGY \"A-H1\" (SGDHDG) ACC"},"translate_title":"科技灾难可能已经结束：价格应该会上涨","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"US3Y.BOND":0.9,"QQQ":0.9,"US10Y.BOND":0.9,"US12M.BOND":0.9,"US2Y.BOND":0.9,"NVDA":0.9,"US30Y.BOND":0.9,"US5Y.BOND":0.9,"US6M.BOND":0.9,"US7Y.BOND":0.9,"MU":0.8,"MSFT":0.8,"DELL":0.8,"META":0.8,"GOOGL":0.8,"AAPL":0.8,"AVGO":0.8,"AMZN":0.8,"TSLA":0.8,"SOUN":0.8,"AMD":0.8,"NQmain":0.71,"US912797HE00.BOND":0.6,"US912797GK78.BOND":0.6,"US912797GL51.BOND":0.6,"US912797GW17.BOND":0.6},"content_text":"Recent market volatility led to a 5% pullback in the S&P 500, with some high quality tech stocks declining by 20-30% or more.Despite near-term volatility, the market's intermediate and longer-term outlook remains favorable, with a potential buying opportunity for high-quality stocks.Anticipation of a September rate cut by the Fed could provide a positive environment for risk assets, including high-quality stocks, with valuations remaining reasonable.Nasdaq 100 futures declined by 10%, bringing tech stocks into a support/buy-in zone, potentially signaling a bottom for the sector.Many top tech stocks experienced significant declines during the recent correction, suggesting a reset process that could lead to a new uptrend.DNY59 We recently witnessed an increase in volatility, so I began exploring several compelling buying opportunities last week. Was this the highly anticipated correction? Is the pullback over already? Or is there more pain ahead? An Exciting Several Weeks In The Market  SPX (StockCharts.com | Advanced Financial Charts & Technical Analysis Tools) These past few weeks have been exciting, especially since the highly anticipated pullback began. The S&P 500 Index (SP500, SPX) had become extremely overbought on a near-term basis and needed to reset. The peak-to-trough pullback has been 5%. Whether that is enough remains to be seen. Still, seeing some healthy rotation and a constructive pullback in many high-quality stocks that got ahead of themselves technically and from a valuation standpoint is a relief. From a technical standpoint, the crucial support remains at the 5,400-5,300 level, and the SPX had a constructive rebound off this critical support point. While we may see more transitory volatility here in the near term, the intermediate and longer-term images remain favorable, and the bullish uptrend remains intact. Therefore, I am treating the recent weakness as a compelling buying opportunity, and I will buy more high-quality stocks if the volatility persists. Tech - Could Have Bottomed For tech, we usually follow the NASDAQ 100-Index (NDX) futures, and I also like the Invesco QQQ Trust ETF (QQQ), the \"Nasdaq 100\" ETF. While the SPX declined by a textbook 5% in the recent rotation and pullback phase, the Nasdaq 100 futures declined by precisely 10%. QQQ (StockCharts.com | Advanced Financial Charts & Technical Analysis Tools) We witnessed a 10% drop in the QQQ, bringing it down into our $460-450 support/buy-in zone. We also see QQQ going from being highly overbought technically to neutral, and now it is approaching oversold conditions. QQQ also dropped below its 50-day MA, much like during prior pullbacks. While there may be more transitory downside, this is a solid spot to increase specific tech. Furthermore, while the QQQ declined by 10%, many top tech stocks got hammered during the recent correction. For Instance:  Apple Inc. (AAPL): 10%. Microsoft Corporation (MSFT): 11%. NVIDIA Corporation (NVDA): 25%. Amazon.com, Inc. (AMZN): 12%. Alphabet Inc. (GOOG, GOOGL): 15%. Meta Platforms, Inc. (META): 18%. Broadcom Inc. (AVGO): 22%. Advanced Micro Devices, Inc. (AMD): 27%. Tesla, Inc. (TSLA): 20%. Micron Technology, Inc. (MU): 33%. Dell Technologies Inc. (DELL): 38%. Snap Inc. (SNAP): 24%. SoundHound AI, Inc. (SOUN): 32%.  While some \"top stocks\" only declined by 10-15%, many other mega gap tech companies declined by 20-30% (or more) during the recent sell-off process. This dynamic suggests that tech stocks may have gone through a constructive reset process and could begin their next move higher again soon. Focusing On The Constructive Fundamental Set-Up Instead of over-focusing on standard near-term market gyrations, market participants should focus on the intermediate and longer-term image favorable for high-quality equities. Solid earnings, robust economic data, decreasing inflation, and an approaching monetary easing cycle should provide a highly constructive atmosphere for stocks and other risk assets. Big Tech Earnings In Focus Many companies have beat their top and bottom line earnings estimates and are guiding to higher next-quarter and full-year targets than anticipated. This week is the busiest week of earnings season, with companies like Microsoft, AMD, Meta, Apple, Amazon, and other mega caps reporting earnings. Many stocks have been punished badly during the run-up in tech earnings. Therefore, we may not need stellar results, as the stocks are beaten up anyway. In-line or slightly better tech earnings could be enough to set the high-quality stocks here back on track in their long-term upward trajectories. Moreover, it's not just tech earnings, as we have the crucial FOMC meeting and the critical jobs numbers this week. This Week's Economic Data Data (Investing.com - Stock Market Quotes & Financial News) There is plenty of news, but the most crucial elements are the FOMC interest rate decision and statement on Wednesday and Friday's critical non-farm payrolls release. There's about a 96% probability that the Fed will leave the benchmark unchanged. Therefore, the market is pricing a \"no move\" Wednesday. Still, we want language indicating a high probability of a rate cut in September, as the market is pricing one in. The market could react negatively to any hawkish tone, as moving away from the September rate cut could upset the existing state of affairs here. Fed Likely To Cut In September - 25 or 50 Bps? Rate probabilities (CMEGroup.com) There is now a 100% probability of a September rate cut. The question now is whether it will be 25 Bps or 50. There is about an 88% chance of a 25 Bps cut and about a 12% chance of a 50 Bps cut. Therefore, the cut will likely be 25 Bps, but that is not likely to disappoint markets. The crucial factor is to get the rate cuts going. Once the easing policy is in motion, stopping will be very challenging. The Fed may need to tolerate higher inflation in the future, but this could be positive for most risk assets, especially high-quality stocks. Significant liquidity could find its place in the market soon, and a solid place for it to flow into is high-quality stocks. Furthermore, we could see the odds of a 50 Bps move increasing, and the upcoming payroll report could increase the odds. The market is looking for 177K jobs, and the Goldilocks number is likely around 100-200K. However, we must walk a delicate tightrope, as we don't want a number below 100K because it seems too weak. We can see some softness in the labor market, but we must avoid deterioration as it could increase the prospects of a hard landing/possible recession, which we want to avoid. Therefore, it's best to stay below 100K, and we want a job number that is not too high because it could decrease the probability of a 50 Bps cut. While a read above 200K would not be considered catastrophic (because the September rate cut is factored in), I still prefer a 100-200K jobs read. The unemployment rate can stay or increase slightly to 4.2-4.3%. There is a low probability that unemployment will drop, and we want to avoid sharp increases to 4.4% or higher as this, too, could increase the odds of a hard landing scenario. Valuations Assessment P/E valuations (WSJ.com) The forward P/E for the SPX is about 22 and only around 28 for the Nasdaq 100. These are not expensive P/E ratios, especially considering the more accessible monetary environment ahead and the likely prospects for future earnings growth, efficiency increases, positive AI effects, and other variables. These could contribute to increasing growth, improving profitability, and multiple expansion. We have a unique and solid combination of constructive factors that should drive stock prices higher as we advance.  Also, I want to draw your attention to the fact that while P/E ratios have adjusted lower in many of the high-flying mega-cap tech names, primary average P/E ratios have roughly maintained their recent levels. They are retreating mildly due to the increased rotation into small/mid-cap and other sectors. Despite the prospects for near-term volatility, I remain constructive on the SPX and stocks in general in the intermediate and longer term. I am keeping my year-end SPX target range at 6,000-6,200.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[{"id":332867567485032,"gmtCreate":1722294537109,"gmtModify":1722294540485,"author":{"id":"3581643766897530","authorId":"3581643766897530","name":"martinho","avatar":"https://static.tigerbbs.com/f376700fba4e7f0e72ae4acf845d5452","vip":1,"crmLevel":4,"crmLevelSwitch":0,"idStr":"3581643766897530","authorIdStr":"3581643766897530"},"htmlText":"Fake news. It will only spiral down","listText":"Fake news. It will only spiral down","text":"Fake news. It will only spiral down","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/332867567485032","repostId":2455963666,"repostType":2,"repost":{"id":"2455963666","kind":"highlight","pubTimestamp":1722268573,"share":"https://ttm.financial/m/news/2455963666?lang=&edition=fundamental","pubTime":"2024-07-29 23:56","market":"sg","language":"en","title":"The Tech Wreck Is Likely Over: Higher Prices Should Be Ahead","url":"https://stock-news.laohu8.com/highlight/detail?id=2455963666","media":"seekingalpha","summary":"Is the pullback over already?Or is there more pain ahead?","content":"<html><body><ul><li>Recent market volatility led to a 5% pullback in the S&amp;P 500, with some high quality tech stocks declining by 20-30% or more.</li><li>Despite near-term volatility, the market's intermediate and longer-term outlook remains favorable, with a potential buying opportunity for high-quality stocks.</li><li>Anticipation of a September rate cut by the Fed could provide a positive environment for risk assets, including high-quality stocks, with valuations remaining reasonable.</li><li>Nasdaq 100 futures declined by 10%, bringing tech stocks into a support/buy-in zone, potentially signaling a bottom for the sector.</li><li>Many top tech stocks experienced significant declines during the recent correction, suggesting a reset process that could lead to a new uptrend.</li></ul><p><figure><picture><img fetchpriority=\"high\" height=\"1024px\" sizes=\"(max-width: 768px) calc(100vw - 36px), (max-width: 1024px) calc(100vw - 132px), (max-width: 1200px) calc(66.6vw - 72px), 600px\" src=\"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1391973547/image_1391973547.jpg?io=getty-c-w750\" srcset=\"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1391973547/image_1391973547.jpg?io=getty-c-w1536 1536w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1391973547/image_1391973547.jpg?io=getty-c-w1280 1280w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1391973547/image_1391973547.jpg?io=getty-c-w1080 1080w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1391973547/image_1391973547.jpg?io=getty-c-w750 750w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1391973547/image_1391973547.jpg?io=getty-c-w640 640w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1391973547/image_1391973547.jpg?io=getty-c-w480 480w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1391973547/image_1391973547.jpg?io=getty-c-w320 320w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1391973547/image_1391973547.jpg?io=getty-c-w240 240w\" width=\"1536px\"/></picture><figcaption><p>DNY59</p></figcaption></figure></p> <p>We recently witnessed an increase in volatility, so I began exploring several compelling buying opportunities last week. Was this the highly anticipated correction? Is the pullback over already? Or is there more pain ahead?</p> <h2>An Exciting Several Weeks In<span> The Market</span> </h2> <p><figure contenteditable=\"false\"><span><img contenteditable=\"false\" height=\"676\" loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2024/7/29/48200183-17222421595774693.png\" width=\"640\"/></span><figcaption><p>SPX (StockCharts.com | Advanced Financial Charts &amp; Technical Analysis Tools)</p></figcaption></figure></p> <p>These past few weeks have been exciting, especially since the highly anticipated pullback began. The S&amp;P 500 Index (SP500, SPX) had become extremely overbought on a near-term basis and needed to reset. The peak-to-trough pullback has been 5%. Whether that is enough remains to be seen. Still, seeing some healthy rotation and a constructive pullback in many high-quality stocks that got ahead of themselves technically and from a valuation standpoint is a relief.</p> <p>From a technical standpoint, the crucial support remains at the 5,400-5,300 level, and the SPX had a<span> constructive rebound off this critical support point. While we may see more transitory volatility here in the near term, the intermediate and longer-term images remain favorable, and the bullish uptrend remains intact. Therefore, I am treating the recent weakness as a compelling buying opportunity, and I will buy more high-quality stocks if the volatility persists.</span></p> <h2>Tech - Could Have Bottomed</h2> <p>For tech, we usually follow the NASDAQ 100-Index (<span>NDX</span>) futures, and I also like the Invesco QQQ Trust ETF (QQQ), the \"Nasdaq 100\" ETF. While the SPX declined by a textbook 5% in the recent rotation and pullback phase, the Nasdaq 100 futures declined by precisely 10%.</p> <p><figure contenteditable=\"false\"><span><img contenteditable=\"false\" height=\"676\" loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2024/7/29/48200183-17222432758117392.png\" width=\"640\"/></span><figcaption><p>QQQ (StockCharts.com | Advanced Financial Charts &amp; Technical Analysis Tools)</p></figcaption></figure></p> <p>We witnessed a 10% drop in the QQQ, bringing it down into our $460-450 support/buy-in zone. We also see QQQ going from being highly overbought technically to neutral, and now it is approaching oversold conditions. QQQ also dropped below its 50-day MA, much like during prior pullbacks. While there may be more transitory downside, this is a solid spot to increase specific tech. Furthermore, while the QQQ declined by 10%, many top tech stocks got hammered during the recent correction.</p> <p><strong>For Instance:</strong></p> <ul> <li>Apple Inc. (AAPL): 10%.</li> <li>Microsoft Corporation (MSFT): 11%.</li> <li>NVIDIA Corporation (NVDA): 25%.</li> <li>Amazon.com, Inc. (AMZN): 12%.</li> <li>Alphabet Inc. (GOOG, GOOGL): 15%.</li> <li><a href=\"https://laohu8.com/S/META\">Meta Platforms</a>, Inc. (META): 18%.</li> <li>Broadcom Inc. (AVGO): 22%.</li> <li>Advanced Micro Devices, Inc. (AMD): 27%.</li> <li>Tesla, Inc. (TSLA): 20%.</li> <li>Micron Technology, Inc. (MU): 33%.</li> <li>Dell Technologies Inc. (DELL): 38%.</li> <li>Snap Inc. (SNAP): 24%.</li> <li><a href=\"https://laohu8.com/S/SOUNW\">SoundHound AI, Inc.</a> (SOUN): 32%.</li> </ul> <p>While some \"top stocks\" only declined by 10-15%, many other mega gap tech companies declined by 20-30% (or more) during the recent sell-off process. This dynamic suggests that tech stocks may have gone through a constructive reset process and could begin their next move higher again soon.</p> <h2>Focusing On The Constructive Fundamental Set-Up</h2> <p>Instead of over-focusing on standard near-term market gyrations, market participants should focus on the intermediate and longer-term image favorable for high-quality equities. Solid earnings, robust economic data, decreasing inflation, and an approaching monetary easing cycle should provide a highly constructive atmosphere for stocks and other risk assets.</p> <h2>Big Tech Earnings In Focus</h2> <p>Many companies have beat their top and bottom line earnings estimates and are guiding to higher next-quarter and full-year targets than anticipated. This week is the busiest week of earnings season, with companies like Microsoft, AMD, Meta, Apple, Amazon, and other mega caps reporting earnings.</p> <p>Many stocks have been punished badly during the run-up in tech earnings. Therefore, we may not need stellar results, as the stocks are beaten up anyway. In-line or slightly better tech earnings could be enough to set the high-quality stocks here back on track in their long-term upward trajectories. Moreover, it's not just tech earnings, as we have the crucial FOMC meeting and the critical jobs numbers this week.</p> <h2><strong>This Week's Economic Data</strong></h2> <p><figure contenteditable=\"false\"><span><img contenteditable=\"false\" height=\"547\" loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2024/7/29/48200183-1722245498634594.png\" width=\"640\"/></span><figcaption><p>Data (Investing.com - Stock Market Quotes &amp; Financial News)</p></figcaption></figure></p> <p>There is plenty of news, but the most crucial elements are the FOMC interest rate decision and statement on Wednesday and Friday's critical non-farm payrolls release. There's about a 96% probability that the Fed will leave the benchmark unchanged. Therefore, the market is pricing a \"no move\" Wednesday. Still, we want language indicating a high probability of a rate cut in September, as the market is pricing one in. The market could react negatively to any hawkish tone, as moving away from the September rate cut could upset the existing state of affairs here.</p> <h2>Fed Likely To Cut In September - 25 or 50 Bps?</h2> <p><figure contenteditable=\"false\"><span><img contenteditable=\"false\" height=\"395\" loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2024/7/29/48200183-17222458850996284.png\" width=\"640\"/></span><figcaption><p>Rate probabilities (CMEGroup.com)</p></figcaption></figure></p> <p>There is now a 100% probability of a September rate cut. The question now is whether it will be 25 Bps or 50. There is about an 88% chance of a 25 Bps cut and about a 12% chance of a 50 Bps cut. Therefore, the cut will likely be 25 Bps, but that is not likely to disappoint markets. The crucial factor is to get the rate cuts going. Once the easing policy is in motion, stopping will be very challenging. The Fed may need to tolerate higher inflation in the future, but this could be positive for most risk assets, especially high-quality stocks. Significant liquidity could find its place in the market soon, and a solid place for it to flow into is high-quality stocks.</p> <p>Furthermore, we could see the odds of a 50 Bps move increasing, and the upcoming payroll report could increase the odds. The market is looking for 177K jobs, and the Goldilocks number is likely around 100-200K. However, we must walk a delicate tightrope, as we don't want a number below 100K because it seems too weak. We can see some softness in the labor market, but we must avoid deterioration as it could increase the prospects of a hard landing/possible recession, which we want to avoid.</p> <p>Therefore, it's best to stay below 100K, and we want a job number that is not too high because it could decrease the probability of a 50 Bps cut. While a read above 200K would not be considered catastrophic (because the September rate cut is factored in), I still prefer a 100-200K jobs read. The unemployment rate can stay or increase slightly to 4.2-4.3%. There is a low probability that unemployment will drop, and we want to avoid sharp increases to 4.4% or higher as this, too, could increase the odds of a hard landing scenario.</p> <h2>Valuations Assessment</h2> <p><figure contenteditable=\"false\"><span><img contenteditable=\"false\" height=\"155\" loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2024/7/29/48200183-17222469933060553.png\" width=\"640\"/></span><figcaption><p>P/E valuations (WSJ.com)</p></figcaption></figure></p> <p>The forward P/E for the SPX is about 22 and only around 28 for the Nasdaq 100. These are not expensive P/E ratios, especially considering the more accessible monetary environment ahead and the likely prospects for future earnings growth, efficiency increases, positive AI effects, and other variables. These could contribute to increasing growth, improving profitability, and multiple expansion. We have a unique and solid combination of constructive factors that should drive stock prices higher as we advance.</p> <div></div> <p>Also, I want to draw your attention to the fact that while P/E ratios have adjusted lower in many of the high-flying mega-cap tech names, primary average P/E ratios have roughly maintained their recent levels. They are retreating mildly due to the increased rotation into small/mid-cap and other sectors. Despite the prospects for near-term volatility, I remain constructive on the SPX and stocks in general in the intermediate and longer term. I am keeping my year-end SPX target range at 6,000-6,200.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>The Tech Wreck Is Likely Over: Higher Prices Should Be Ahead</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nThe Tech Wreck Is Likely Over: Higher Prices Should Be Ahead\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-07-29 23:56 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4707688-the-tech-wreck-is-likely-over-higher-prices-should-be-ahead><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Recent market volatility led to a 5% pullback in the S&P 500, with some high quality tech stocks declining by 20-30% or more.Despite near-term volatility, the market's intermediate and longer-term ...</p>\n\n<a href=\"https://seekingalpha.com/article/4707688-the-tech-wreck-is-likely-over-higher-prices-should-be-ahead\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1391973547/image_1391973547.jpg","relate_stocks":{"BK4566":"资本集团","LU0792757196.USD":"TEMPLETON SHARIAH GLOBAL EQUITY FUND \"A\" (USD) ACC","SOUN":"SoundHound AI Inc","QQQ":"纳指100ETF","LU1551013342.USD":"Allianz Income and Growth Cl AMg2 DIS USD","LU0056508442.USD":"贝莱德世界科技基金A2","LU0208291251.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) INC","BK4508":"社交媒体","LU0048584097.USD":"FIDELITY FUNDS  GLOBAL THEMATIC OPPORTUNITIES \"A\" (USD) INC","BK4543":"AI","MU":"美光科技","IE00BZ199S13.USD":"BNY MELLON MOBILITY INNOVATION \"B\" (USD) ACC","BK4538":"云计算","BK4501":"段永平概念","LU1242518857.USD":"FULLERTON LUX FUNDS - ASIA ABSOLUTE ALPHA \"I\" (USD) ACC","BK4555":"新能源车","LU2249611893.SGD":"BNP PARIBAS ENERGY TRANSITION \"CRH\" (SGD) ACC","DELL":"戴尔","BK4503":"景林资产持仓","IE00B3S45H60.SGD":"Neuberger Berman US Multicap Opportunities A Acc SGD-H","AVGO":"博通","AMZN":"亚马逊","TSLA":"特斯拉","MSFT":"微软","LU0345769128.USD":"NINETY ONE GSF GLOBAL EQUITY \"A\" (USD) ACC","GOOGL":"谷歌A","LU0861579265.USD":"联博低波幅策略股票基金A","IE00B3SWFQ91.USD":"PIMCO BALANCED INCOME AND GROWTH \"E\" (USD) INC","AAPL":"苹果","AMD":"美国超微公司","META":"Meta Platforms, Inc.","BK4534":"瑞士信贷持仓","NVDA":"英伟达","IE00B775SV38.USD":"NEUBERGER BERMAN US MULTICAP OPPORTUNITIES \"A\" (USD) ACC","BK4567":"ESG概念","LU2458330243.SGD":"FRANKLIN SHARIAH TECHNOLOGY \"A-H1\" (SGDHDG) ACC"},"source_url":"https://seekingalpha.com/article/4707688-the-tech-wreck-is-likely-over-higher-prices-should-be-ahead","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2455963666","content_text":"Recent market volatility led to a 5% pullback in the S&P 500, with some high quality tech stocks declining by 20-30% or more.Despite near-term volatility, the market's intermediate and longer-term outlook remains favorable, with a potential buying opportunity for high-quality stocks.Anticipation of a September rate cut by the Fed could provide a positive environment for risk assets, including high-quality stocks, with valuations remaining reasonable.Nasdaq 100 futures declined by 10%, bringing tech stocks into a support/buy-in zone, potentially signaling a bottom for the sector.Many top tech stocks experienced significant declines during the recent correction, suggesting a reset process that could lead to a new uptrend.DNY59 We recently witnessed an increase in volatility, so I began exploring several compelling buying opportunities last week. Was this the highly anticipated correction? Is the pullback over already? Or is there more pain ahead? An Exciting Several Weeks In The Market  SPX (StockCharts.com | Advanced Financial Charts & Technical Analysis Tools) These past few weeks have been exciting, especially since the highly anticipated pullback began. The S&P 500 Index (SP500, SPX) had become extremely overbought on a near-term basis and needed to reset. The peak-to-trough pullback has been 5%. Whether that is enough remains to be seen. Still, seeing some healthy rotation and a constructive pullback in many high-quality stocks that got ahead of themselves technically and from a valuation standpoint is a relief. From a technical standpoint, the crucial support remains at the 5,400-5,300 level, and the SPX had a constructive rebound off this critical support point. While we may see more transitory volatility here in the near term, the intermediate and longer-term images remain favorable, and the bullish uptrend remains intact. Therefore, I am treating the recent weakness as a compelling buying opportunity, and I will buy more high-quality stocks if the volatility persists. Tech - Could Have Bottomed For tech, we usually follow the NASDAQ 100-Index (NDX) futures, and I also like the Invesco QQQ Trust ETF (QQQ), the \"Nasdaq 100\" ETF. While the SPX declined by a textbook 5% in the recent rotation and pullback phase, the Nasdaq 100 futures declined by precisely 10%. QQQ (StockCharts.com | Advanced Financial Charts & Technical Analysis Tools) We witnessed a 10% drop in the QQQ, bringing it down into our $460-450 support/buy-in zone. We also see QQQ going from being highly overbought technically to neutral, and now it is approaching oversold conditions. QQQ also dropped below its 50-day MA, much like during prior pullbacks. While there may be more transitory downside, this is a solid spot to increase specific tech. Furthermore, while the QQQ declined by 10%, many top tech stocks got hammered during the recent correction. For Instance:  Apple Inc. (AAPL): 10%. Microsoft Corporation (MSFT): 11%. NVIDIA Corporation (NVDA): 25%. Amazon.com, Inc. (AMZN): 12%. Alphabet Inc. (GOOG, GOOGL): 15%. Meta Platforms, Inc. (META): 18%. Broadcom Inc. (AVGO): 22%. Advanced Micro Devices, Inc. (AMD): 27%. Tesla, Inc. (TSLA): 20%. Micron Technology, Inc. (MU): 33%. Dell Technologies Inc. (DELL): 38%. Snap Inc. (SNAP): 24%. SoundHound AI, Inc. (SOUN): 32%.  While some \"top stocks\" only declined by 10-15%, many other mega gap tech companies declined by 20-30% (or more) during the recent sell-off process. This dynamic suggests that tech stocks may have gone through a constructive reset process and could begin their next move higher again soon. Focusing On The Constructive Fundamental Set-Up Instead of over-focusing on standard near-term market gyrations, market participants should focus on the intermediate and longer-term image favorable for high-quality equities. Solid earnings, robust economic data, decreasing inflation, and an approaching monetary easing cycle should provide a highly constructive atmosphere for stocks and other risk assets. Big Tech Earnings In Focus Many companies have beat their top and bottom line earnings estimates and are guiding to higher next-quarter and full-year targets than anticipated. This week is the busiest week of earnings season, with companies like Microsoft, AMD, Meta, Apple, Amazon, and other mega caps reporting earnings. Many stocks have been punished badly during the run-up in tech earnings. Therefore, we may not need stellar results, as the stocks are beaten up anyway. In-line or slightly better tech earnings could be enough to set the high-quality stocks here back on track in their long-term upward trajectories. Moreover, it's not just tech earnings, as we have the crucial FOMC meeting and the critical jobs numbers this week. This Week's Economic Data Data (Investing.com - Stock Market Quotes & Financial News) There is plenty of news, but the most crucial elements are the FOMC interest rate decision and statement on Wednesday and Friday's critical non-farm payrolls release. There's about a 96% probability that the Fed will leave the benchmark unchanged. Therefore, the market is pricing a \"no move\" Wednesday. Still, we want language indicating a high probability of a rate cut in September, as the market is pricing one in. The market could react negatively to any hawkish tone, as moving away from the September rate cut could upset the existing state of affairs here. Fed Likely To Cut In September - 25 or 50 Bps? Rate probabilities (CMEGroup.com) There is now a 100% probability of a September rate cut. The question now is whether it will be 25 Bps or 50. There is about an 88% chance of a 25 Bps cut and about a 12% chance of a 50 Bps cut. Therefore, the cut will likely be 25 Bps, but that is not likely to disappoint markets. The crucial factor is to get the rate cuts going. Once the easing policy is in motion, stopping will be very challenging. The Fed may need to tolerate higher inflation in the future, but this could be positive for most risk assets, especially high-quality stocks. Significant liquidity could find its place in the market soon, and a solid place for it to flow into is high-quality stocks. Furthermore, we could see the odds of a 50 Bps move increasing, and the upcoming payroll report could increase the odds. The market is looking for 177K jobs, and the Goldilocks number is likely around 100-200K. However, we must walk a delicate tightrope, as we don't want a number below 100K because it seems too weak. We can see some softness in the labor market, but we must avoid deterioration as it could increase the prospects of a hard landing/possible recession, which we want to avoid. Therefore, it's best to stay below 100K, and we want a job number that is not too high because it could decrease the probability of a 50 Bps cut. While a read above 200K would not be considered catastrophic (because the September rate cut is factored in), I still prefer a 100-200K jobs read. The unemployment rate can stay or increase slightly to 4.2-4.3%. There is a low probability that unemployment will drop, and we want to avoid sharp increases to 4.4% or higher as this, too, could increase the odds of a hard landing scenario. Valuations Assessment P/E valuations (WSJ.com) The forward P/E for the SPX is about 22 and only around 28 for the Nasdaq 100. These are not expensive P/E ratios, especially considering the more accessible monetary environment ahead and the likely prospects for future earnings growth, efficiency increases, positive AI effects, and other variables. These could contribute to increasing growth, improving profitability, and multiple expansion. We have a unique and solid combination of constructive factors that should drive stock prices higher as we advance.  Also, I want to draw your attention to the fact that while P/E ratios have adjusted lower in many of the high-flying mega-cap tech names, primary average P/E ratios have roughly maintained their recent levels. They are retreating mildly due to the increased rotation into small/mid-cap and other sectors. Despite the prospects for near-term volatility, I remain constructive on the SPX and stocks in general in the intermediate and longer term. I am keeping my year-end SPX target range at 6,000-6,200.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":3,"commentSize":1,"repostSize":1,"favoriteSize":1,"likeStatus":false,"favoriteStatus":false}}