Market sell-off won’t last for one key reason, CIO says: There’s no tech bubble to burst
Global markets are cautiously rebounding from an early-August rout — and one asset manager says there’s no need to fear a burst tech bubble causing a persistent downturn.
Technology stocks were among the hardest-hit by the recent sell-off, as declines of 1.6% in July and more than 4% so far in August for Wall Street’s tech-dominated Nasdaq 100 index have revived a debate about whether the sector is in a bubble waiting to burst.
“I just don’t see a tech bubble. Yes, a few stocks have done well, and they have done well on earnings that they have delivered,” Manish Singh, chief investment officer at Crossbridge Capital, told CNBC’s “Squawk Box Europe” on Monday.
Pointing to the Nasdaq, Singh noted that on an equally-weighted basis — giving each stock the same weight regardless of market capitalization — the index is flat over the last three years.
“So if you have 100 stocks and seven of them are doing well because they have delivered [on] earnings, that’s fine. There are 90 other stocks which haven’t done well, so I do not see any reason to be concerned that you’re going to enter a bearish pattern where the market is overbought and therefore people are going to sell. I just don’t see that pattern,” he said.
The tech sector’s recent bull run has in part been powered by the so-called “Magnificant Seven” of Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla.