Healthy L Street sees a bright side in the ‘healthy’ tech selfoff

NEW YORK (Reuters) – Some of Wall Street’s biggest players are looking at the stock market’s recent tech-led selloff as a means of instability rather than a long slide – and they don’t see it as a reason to run. The door.

File photo: February 10, 2009, A street sign appears in front of the New York Stock Exchange on New York’s W Street Street. Reuters / Eric Thayer / File photo

Invesco called the sharp fall in the Nasdaq this week a “healthy period of consolidation” while fund manager Lord Abbott said the US stock valuation would be justified based on an analysis of companies’ earnings.

Sep Sept., Goldsmith S&P 500 reiterated its year-end 00,000 year-end target on the S&P 500, which was up nearly%% near the index on Wednesday, when UBS Global Wealth Management recommended that consumers have “ease in the markets”. .

His optimism highlights that the Federal Reserve’s pledge to keep interest rates at record levels and hopes for success in the COVID-19 vaccine have made gains in the market this year, although many U.S. Beware of presidential elections and massive options sitting on the tech. Relevant stocks may intensify market swings in the remaining months of 2020.

“We think the healthcare we’re going through is a healthy correction,” said Fischer Troy Geisky, co-chief investment officer at alternative investment company Skybridge. “It simply came to our notice then. But if you are a technical investor you have to understand that valuation is too high. ”

The Nasdaq posted its best day since April, Wednesday, the day after falling into the correctional zone, usually defined as a fall of 10% or more from the recent peak. Other key indices also rallied after falling sharply on Wednesday.

“I will consider this route not as an improvement, but as a digestion,” Christina Hooper, Invesco’s chief global market strategist, said in a recent note.

The second-quarter earnings of the S&P 500 were 23.1% higher than expected, well above the five-year average of 4.7%, Lord Abbott’s analysts said in a recent note.

The report said that the pace of earnings and the intensity of the analyst’s recurrence of earnings are outpacing the markets, indicating that a high valuation on US equities is appropriate.

Still, some believe more volatility is in store. UBS Global Wealth Management’s latest poll of investors on November 65 shows the U.S. With just weeks left in the presidential election, 65% cited politics as their top concern.

Well-known investor Stanley Drucknmiller – this year’s bullish skeptic again sounded a bearish note on Wednesday, warning CNBC that the stock market is in a mania provoked by the Federal Reserve.

Uncertainty over purchase of wide options by Softbank Group Corp (9984.T) Also stalled in the markets, creating another risk.

Gayesky of Skybridge said he would see an opportunity to increase equity risk if the Nasdaq fell 20% or the S&P 500 fell 15% from their respective highs and there were other supporting signals in the market. As the Fed expands its balance sheet.

Billy’s investment strategist, Willie Delwich, said any sell-offs that spread beyond large tech-related stocks could lead to more pullbacks.

In the coming days, Delwich is looking for investor cautionary signs – such as buying put options, reducing outflows from equity funds and bullish views in surveys – which indicate that any over-assurance has diminished.

Another indicator is how investors respond to key technical support levels, said Keith Lerner, chief market strategist at Truist / Suntrust Advisory. For example, the Nasdaq closed below its 50-day moving average for the first time since April on Tuesday, but was up on Wednesday.

“If you see these markets just cut through the support level, it’s a sign that the sellers’ hand is up,” Lerner said.

Reporting by Lewis Krauskopf; Additional reporting by Megan Davis; Edited by Ira Iosebashvili and Leslie Adler

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