Stocks of Amazon, Meta and Alphabet plunged last week following unexpected earnings results, but investors looking to buy falling tech stocks should hold off for now, according to strategist Dan Scott. It says. Instead, market participants should wait for a notable change on interest rates by the Federal Reserve, Scott, head of multi-asset management at Swiss asset manager von Tobel, told CNBC on Friday. While referring to forward guidance on interest rates by the Reserve Board (Fed), “we will not start buying technology beyond our risk range just yet, because the Federal Reserve (Fed) will announce a pivot We are unlikely to see a sustainable recovery until then.” Scott pointed to the “soft language” of Minneapolis Fed President Neil Kashkari and St. Louis Fed President Bullard. Still, he suggested, that wasn’t enough to get the central bank out of its hawkish stance on rate hikes. “We need the market to understand that the rate hike cycle is over, where there is some assurance of where the terminal rate will be before tech stocks rise again,” advises Scott. The client he owns assets worth $50 billion. “We’re not there yet.” “The market wants to go up.” Evans May Wealth’s managing partner, Lizzie Evans, told her CNBC on Friday: Instead, she expects multiple compressions in big tech stocks, including lower price-to-earnings ratios, by the end of the year. “There are signs that the market is hoping for a recovery, but is somewhat caught between the Fed’s rhetoric and rate hikes,” she added. Evans said the stock market could rise 5-15% by the end of the year if the Federal Reserve hikes interest rates by 50 basis points in December, but warns that is unlikely. The market expects rates to rise by 75 basis points on November 2nd and a similar rise on December 14th. Recent years—reporting lackluster predictions. Amazon’s shares plunged 13% in extended trading on Thursday after the company released disappointing forecasts. Meta also lost almost a quarter of its value on Thursday, returning the stock to its early 2016 levels. Shares of Google’s parent company Alphabet closed down more than 8% on Tuesday after revealing a slowdown in its advertising business. To maintain margins in a challenging macro environment, tech giants are now focusing on controlling costs. Meta and Salesforce are among the companies in Silicon Valley that have slowed their hiring pace this year, with the likes of Coinbase and Netflix resorting to layoffs. Vontobel’s Scott said Amazon’s results and subsequent share price response show how much investors are paying attention to the future growth trajectory of tech companies. “15% revenue growth is great. That’s what I want in tech stocks. The problem is the outlook. 2-8% growth is not what I want in tech stocks,” he said. said.
Buy the dip on tech stocks? Strategist reveals when to get back in