US tech stocks have run their course for now – and face a 20% to 40% correction, veteran trader says
rising 7% and 18%. The gains have largely been fueled by investor optimism that the Federal Reserve will halt its aggressive monetary policy as inflation cools. . According to Bank of America, the benchmark index delivered its"best beat rate after Week 1 since at least 2012," a team led by Savita Subramanian, BofA's head of US equity and quantitative strategy, said in a note.
"The market has been led by tech and so I expect a rotation out of technology and into the lagging sectors. Technology has run its course for now. Because of the bank overhang, I believe that cloud is going to cast a pall over financials. There are land mines with other banks that haven't shown their hand yet," Bierman said.
"Technology and industrials could be vulnerable to a 20% to 40% correction. Will the entire market fall off a cliff? No," he added. Bierman highlighted that retail and oil stocks instead, are going to make a comeback because their valuations are compelling. "It is still not an investor's market. An investor's market is when interest rates are declining, inflation is under control, sales are up, and hiring is up. You have none of that," Bierman continued.
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