Wall Street sees a bright side to ‘healthy’ technology sales

NEW YORK (Reuters) – Some of Wall Street’s biggest players see the stock market’s latest technology – led sale as more of a turbulent trend than the start of a long slide – and they do not see it as a factor driving the door.

This week Invesco called the sharp decline in the Nasdaq a “healthy consolidation period,” while company manager Lord Abbott said U.S. stock ratings could be pleasing based on companies ’earnings analysis.

On September 4, Goldman Sachs reiterated 6% higher than its index on Wednesday in its S&P 500 year-end price target, while UPS Global Wealth Management recommended “easing markets” without sidelining customers. .

The Federal Reserve’s pledge to keep interest rates low and hopes that the vaccine for COVID-19 will improve this year demonstrate their optimism about market profits, although many are wary of the US presidential election and the massive options in technology. Related stocks are likely to accelerate market changes in the remaining months of 2020.

Troy Kayeski, co-CEO of alternative investment firm Skybridge, said: “We think healthy correction removes foam.” We can certainly fall further. But if you are a tech investor you need to understand that ratings are very high. ”

Nasdaq released its best day since Wednesday April, a day after falling in revised territory, which is generally defined as a fall of 10% or more from the recent highs. Other key indices also rebounded after a sharp decline on Wednesday.

“I do not think this way is a correction, but I consider it digestible,” Christina Hooper, Invesco’s chief global market strategist, said in a recent note.

Revenue from the S&P 500 in the second quarter was 23.1% higher than expectations, well above the five-year average of 4.7%, Lord Abbott analysts said in a recent report.

“The pace of earnings and the scale of the analyst’s earnings correction suggest that in other markets, higher ratings of U.S. stocks are pleasing,” the report said.

Still, some believe there is more volatility. A recent poll by investors from UPS Global Wealth Management found that just a few weeks before the November 3 US presidential election, 65% of people saw politics as their main concern.

Celebrity investor Stanley Truckenmiller – this year’s rally suspect – sounded a rough note again on Wednesday, warning on CNBC Here The stock market is fueled by the Federal Reserve.

Uncertainty over buying great options by Softbank Group Corp.9984.D.) Hanging in the markets and creating another risk.

Skybridge’s Kaesky said a sharp fall, such as a 20% fall in the Nasdaq or a 15% drop in the S&P 500, could see an increase in equity risk, and there are other signs of support for the market as the central bank expands its reserves.

Willie Delwich, an investment strategist at Beirut, said any sell-off that extends beyond large technology-related stocks that have led the markets higher could be a sign that the retreat could be further expanding.

In the coming days, Delwich is looking for signs of increasing investor alertness – such as the purchase of boot options, the exit from equity funds and the decline in positive views on surveys – indicating that any excess interest has waned.

Keith Lerner, chief market strategist for Troist / SunTrust consulting, said another indicator was how investors would respond to key technical support levels. For example, the Nasdaq closed below its 50-day moving average for the first time since April on Tuesday, but was above it on Wednesday.

“If you see these markets cutting support levels, this is a sign that there is an oversupply for sellers,” Lerner said.