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The Dow lost more than 600 points, down 2.4%. The S & P 500 sank more than 3%.
The Nasdaq, which has a high technicality, has dropped more than 4% – its largest daily drop since August 2011. It is now in a correction, falling by almost 13% from its absolute record recorded earlier this year . Technology stocks dropped as a result of disappointing results from Texas Instruments and AT & T, CNN's parent company.
"You can not just say that technology is going to do good things or even that FANG is going to do good things, you need to be more selective," said Daniel Morgan, Senior Portfolio Manager at Synovus Trust Company.
Time to choose in technology
But that may not be enough to stop the slide of the technology sector – or the rest of the market in this respect.
A bigger picture of concern over the broader market has come back in recent days, including rising interest rates, increased regulation in the light of the Facebook data scandal (the F in FANG ) and the growing trade war with China.
Tech is not immune to macro market trends. In fact, some would argue that technology has more leeway because the industry has been doing so well for so long.
"You did not need discernment with technology before because it was doing so well in the last decade, but now people have to look at different assessments and how each society is doing," he said. Sylvia Jablonski, institutional strategist of the ETF. at Direxion.
For example, she added, Google parent of the alphabet (the G in FANG) and Amazon (the A in the FANG) both have large growing cloud computing units, just like Microsoft. Both will report their latest earnings after Thursday's closing.
As a result, Jablonski said, Google's shares could be good value at a time when the broader technology sector still seems expensive.
Tony Roth, Investment Director at Wilmington Trust, agreed. He said investors should choose their places in technology right now.
"The technology is not monolithic – some of the known names such as Google, Apple and Microsoft still look attractive," Roth said. "Then you have Cisco and Oracle, who have successfully transitioned to the cloud."
But Roth noted that other companies are in trouble.
Slowing economic growth will eventually ruin technology
Twitter and Snap have both fallen since posting their second quarter results this summer due to concerns about growth in the number of users.
And concerns over increased regulation abroad as a result of privacy scandals could make the situation more difficult for all social media companies.
"It is also important to monitor the international landscape, which is very different from what we are seeing here." Trade tensions and different international regulations could make growth abroad more difficult, "said Mike Loewengart, vice – President of the investment strategy for E * Commerce.
Then there is the perspective part of the equation. Morgan of Synovus Trust noted that the technology sector is as good as the economy in general.
If the combination of a trade war, higher rates and lower falling sugar rates due to lower tax rates start to weigh on growth, this will be bad news for the technology.
"Strong earnings may not be enough to displace the technology barometer because the weather is so bad, GDP could be the kiss of death, and if GDP collapses, technicians will be crushed," said Morgan. .
"Business IT leaders are going to make a difference in spending, and that's a real concern, and technology spending may be slowing down in 2019," he added.
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