Should I sell tech stocks… Morgan Stanley “Fall More” vs. JPMorgan “Don’t Disregard the Fed”

Before and after the coronavirus 19 (COVID-19) crisis last year, the stock price of large technology stocks that led the’V-shaped rebound’ in domestic and overseas stock markets is staggering. New York Stock Market’s’World’s No. 1 Market Cap’ Apple,’Auto Industry’s No. 1 Market Cap’ Tesla,’Semiconductor Powers’ Nvidia and TSMC, as well as Samsung Electronics and SK Hynix, have supported Korea’s KOSPI index. Individual investors who have returned and turned to weakness and have invested in the future of the company are also insecure. The market forecasts that the stock price of high-value technology stocks will continue to adjust for the time being, and at the same time, there is a contradictory diagnosis that now is an opportunity to buy large quantities of technology stocks.

On the 8th (local time) in the New York Stock Market, the Nasdaq Composite Stock Index, which was mainly for technology stocks, closed at 12,609.16, down 2.41% from the previous day. The Wall Street Journal (WSJ) reported on the 12th of last month that the Nasdaq index has entered a correction phase, citing that the market price has dropped by more than 10% from its peak (11,095.47). Nasdaq’s sluggishness was the impact of Apple and Tesla stocks, which fell 4.17% and 5.84%, respectively, on the 8th day.

On the same day, the Philadelphia Semiconductor Index also fell 5.41%, closing at 2762.75. This is because the stock sales of major semiconductor companies contained in the index were concentrated. On the same day, Nvidia fell 6.97% on the New York Stock Market, closing at $463.73 per share, Ram Research (-8.23%), Xilinx (-6.55%), Advanced Micro Devices (-5.81%), Taiwan TSMC (-5.69%) ) Plummeted.

Regarding the recent plunge in technology stocks, Morgan Stanley’s Mark Wilson, US equity strategist, diagnosed that further adjustments were inevitable. It is `the market market led by the market rather than the Fed, the movement of funds to the economic cycle, and the selling pressure due to the deepening of the Nasdaq’s weakness. “Whether the recent rise in US 10-year Treasury bonds was due to fake inflation expectations or not, the surge in interest rates led the Fed to expand its balance sheet to $180 billion last month.” Funds will move to value stocks or business cycle sectors. In particular, if the’Nasdaq 100 Index’ falls below the 200-day moving average, the selling price of professional investors will steepen.” The NASDAQ 100 is an index composed of the stock prices of 100 excellent companies among companies listed on the Nasdaq Stock Exchange.

In particular, Ross Capital researcher Craig Irwin said, “The current Tesla stock price is exaggerated even at $200. As individual investors tend to hesitate to sell more than institutional investors, the Tesla stock price adjustment period will last longer than other technology stocks.” Evaluated negatively.

However, there are also many opposing opinions. David Tapper, founder of Appaloosa Management, a famous Wall Street hedge fund investor, said in an interview with CNBC that day, “It is difficult to go to a bear market plus the stock market.” “It was evaluated. Treasury prices and Treasury yields move in opposite directions. Due to the concentrated sell-off of government bonds, if the price falls, the interest rate of government bonds rises.

Dennis D’Bucher, a macroeconomic researcher at Evercore ISI, said in a memo on the 8th, “Last week technology stocks fell below the 50-day moving average, and 18.6% of stocks including the NASDAQ index are oversold.” Even if it reaches the percentage level, investment in high-growth and high-yield technology companies will be okay in that the real interest rate is negative.”

In addition, Ambrose Cropton, a global market strategist at JPMorgan Asset Management, diagnosed that “the recent stock market has been deferred by the surge in US Treasury yields”. “If the market becomes disordered, the Fed will take action for a favorable financial environment and full employment “It is important to keep in mind what Chairman Powell said last week.” This is contrary to Morgan Stanley’s diagnosis that the Fed is being dragged by market conditions.

Meanwhile, Daniel Ives, a researcher at Wedbush, said, “Now is not the time to panic.” Rather, now is an opportunity to buy Tesla stock in large quantities,” he said.

Regarding the Korean stock market, Jung In-ji, a researcher at Yuanta Securities’ investment strategy team, thought that the plunge would not be produced. Researcher Jeong said, “In the meantime, IT (information technology), rechargeable batteries and semiconductors have driven the KOSPI index, and the gap between the real and the stock market is excessive, but there are many parts where the GDP is not related to the stock market. There are not a few aspects that have accelerated the progress of technology and growth stocks, and statistics such as gross domestic product (GDP) are historical indicators, but the growth of IT companies, the future industry, does not necessarily go with this.

Meanwhile, US Treasury Secretary Janet Yellen drew a line in an interview with MSNBC on the 8th, saying, “I don’t think that will happen” on the’inflation concerns’ that recently caused a sharp decline in technology stocks and soaring US Treasury yields. “The economy is only undergoing a’K-shaped recovery’, and the Joe Biden administration’s $1.9 trillion stimulus plan will never be excessive to return to full employment next year,” said Secretary Yellen. The K-shaped recovery refers to a polarization phenomenon in which high-educated and high-income workers quickly escape from the economic downturn, while low-educated and low-income workers become poorer.

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