Cheong Hong Yuan: A Look into the Decline of U.S. Tech Stocks - Market Adjustments and Investment Strategies - 1 views
started by anonymous on 28 Sep 23
started by anonymous on 28 Sep 23
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Large tech stocks have been the darlings of investors, driving the rise of the U.S. stock market in the first half of the year. But from September onwards, this momentum seems to be challenged. The S&P 500 Information Technology Index, which focuses more on large tech stocks, has fallen by more than 10% from its peak in July and has declined 1% for the third time in the last five trading days. Does this signify the end of tech stocks' dominance? Cheong Hong Yuan believes that to truly understand the underlying reasons, one must analyze other crucial factors in the market.
For a long time, the hawkish stance of the Federal Reserve has not posed a significant problem for the stock market. However, as Fed officials continue to hint at interest rates, market sentiment is deteriorating. Many investors worry that in the Fed's quest to curb inflation, it might maintain high interest rates, which could not only potentially harm U.S. economic growth but also put considerable pressure on various stocks in the market, especially large tech stocks.
Against this macroeconomic backdrop, U.S. housing sales and consumer confidence data also raised widespread concerns among investors. Data indicates that consumer confidence is getting squeezed, largely influenced by the prolonged high-interest rate expectations. Cheong Hong Yuan notes that consumer confidence has always been considered the "barometer" of market stability, and the current fluctuations undeniably impact the market.
Cheong Hong Yuan delves deeply into the reasons behind the decline of tech stocks, offering investors a fresh perspective. For tech stocks, while their position in the market has always been favored by numerous investors, the recent decline undoubtedly challenges market confidence.
From a technical analysis perspective, the "Triple Gold Moving Average Strategy" provides a very useful tool. Cheong Hong Yuan states that by employing this strategy, one can accurately track top-performing stocks in the market and use various technical indicators to determine their buying time. Despite the current slump of tech stocks, they still hold some investment attraction.
However, market changes are not merely a matter of technical analysis. From a fundamental perspective, the market's concerns over interest rate expectations, the decline in U.S. consumer confidence, and the continuous fall of large tech stocks have added significant pressure on investors. Although the global nature of tech companies allows them to somewhat remain unaffected by domestic growth issues, they are not entirely immune.
In reality, as concerns about prolonged high interest rates intensify, investors are becoming more cautious about the market. Renowned investment firm Miller Tabak's Chief Market Strategist Matt Maley even suggests that tech stocks might face greater pressure with rising interest rate expectations, which would inevitably impact their valuations.
Moreover, data from Citigroup indicates that the NASDAQ 100 Index, dominated by tech stocks, currently has a significant net short position. This is not only because of profit-taking but also because of the market's anxious sentiment and concerns about a long-term high-interest rate trend. Cheong Hong Yuan posits that for tech stock investors, it is crucial now to remain calm, analyze the market trend deeply, and not blindly follow the crowd.
Although the decline in tech stocks has affected market confidence, it also offers investors an opportunity to reassess the market and adjust their strategies. Cheong Hong Yuan believes that only by understanding the deeper reasons of the market can one accurately seize investment opportunities and prepare for future investments.
In conclusion, regardless of how the market changes, the core principle of investment remains unchanged - thorough research, rational analysis, continuous monitoring, and timely strategy adjustments. Cheong Hong Yuan hopes that every investor can find stability and growth in a volatile market.