June 29, 2022

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Longest contraction period since the dotcom bubble |  finansavisin

Longest contraction period since the dotcom bubble | finansavisin

This week, the Nasdaq fell 3.8 percent, its seventh consecutive week of decline, and the longest losing streak on the high-tech exchange in 21 years — when the dot-com bubble burst.

Inflation, rising interest rates, the Ukraine war and deflation in China have all created a bad mood in stock markets, and led to an especially brutal decline for investors in technology and growth stocks, according to CNBC.

Since the peak on November 19, the Nasdaq has fallen 29 percent to close Friday at 11,354.62 points. The S&P 500 didn’t do badly, but it’s still not far from a 20 percent drop from the top early in the year.

Heavy for heavy weights

Over the past week, Cisco was among the biggest losers, down 13 percent. The downturn came after an unexpected drop in the network giant’s revenue, while Cisco claims the drop comes from its decision to close operations in Russia and Belarus along with supply problems due to shutdowns in China.

In addition, Dell, which presented its quarterly report this week, fell by 11 percent, software company Shopify fell by 10 percent, while cloud software company Workday fell by about 9 percent after analysts lowered its rating due to recession fears, according to CNBC.

Polished values: Elon Musk’s Tesla has lost 14 percent of its market value in the past week. Photo: Bloomberg

For the world’s richest man, Elon Musk, the week wasn’t the best either. Earlier this week, it was revealed that a former SpaceX employee had entered into a settlement with the company after Musk was accused of sexually abusive behaviour.

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In addition, Twitter, which Musk is about to buy, is down at $54.20 per share. 6 percent this week to $38.29, while Tesla fell 14 percent to $663.90.

Among the major technology companies, Apple shares fell 6.5 percent. This is the eighth consecutive week of decline for the IT giant. At the same time, Alphabet stock is down 6%, while Amazon is down about 5%.

– buy dipping

Since the fall has become so large and prolonged, this has caused more analysts and managers to start seeing buying opportunities. Christina Huber, chief global strategist at Invesco, is one of them.

The most underrated parts of the tech world will come under pressure. Huber thinks we could see some bankruptcies, but most technology will come out stronger than this.

Therefore, she recommends that you be selective when buying technology stocks today.

Focus on companies with strong cash flow and wide margins. It’s also hit hard, but I think it’s a good buying opportunity now, says the chief strategist.

At Morningstar, chief strategist David Sekera believes the stock market crash is over. Possible candidates for purchase are Alphabet, Amazon, Microsoft, and Meta.

So far this year, these stocks have fallen more than the average for the rest of the market. We are convinced that there is value in these companies for long-term investors. Buying a snorkel, is Sekera’s recommendation.