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On November 8, Chicago Mayor Brandon Johnson addressed the UN Human Rights Council on November 7. Johnson stated that the US federal governments refusal to accept review by the Human Rights Council was an attempt to evade scrutiny. He argued that the Human Rights Council should apply the same accountability standards to the US federal government as it does elsewhere in the world, and that no country is above international law. Johnson called on the Human Rights Council to send independent experts to Chicago to investigate the challenges facing the city; he also urged the Council to take further accountability measures, including convening a special session to investigate the worsening human rights crisis in the United States. The UN Human Rights Council was scheduled to hold its fourth round of Universal Periodic Review (UPR) on November 7, but the US representative refused to attend, preventing the review from proceeding normally. The Human Rights Council adopted a decision that day urging the United States to resume cooperation with the UPR mechanism.Russian Ministry of Defense: Russian troops have occupied the village of Vovche in the Dnipropetrovsk region of Ukraine.Ukrainian Prime Minister: Russia’s attack on Ukrainian dams damaged several large energy facilities in the Kyiv, Kharkiv and Poltava regions.November 8th - Pfizer has finalized its $10 billion acquisition offer for Metsera, a startup focused on weight-loss drugs, after a bidding war with Novo Nordisk. Novo Nordisk stated that after careful evaluation, it decided not to raise its offer and will continue to monitor business expansion and other acquisition opportunities. Under the agreement, Pfizer will complete the transaction at a maximum price of $86.25 per share, including an initial cash payment of $65.60 per share, and an additional consideration of up to $20.65 per share if certain performance targets are met.November 8th - On November 7th local time, Canadian Prime Minister Mark Carney stated that the increasingly close economic relationship between Canada and the United States over the past decades has come to an end. Carney said that Canada once enjoyed some economic advantages due to its close ties with the US, but this has now become a weakness. He described this change as rapid and almost seamless, and called for a swift and radical shift in Canadas economic strategy.

If technology stocks plunge again, is it an omen of crash or a chance to make profit?

Eden

Oct 25, 2021 13:27

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Reasons for the surge in technology stocks


Quantitative easing

Quantitative easing(QE) measure has caused a lot of funds to flow into the stock market, causing the stock market to deviate from the fundamentals. In the past three months, the Fed released more than $3 trillion through unlimited quantitative easing measures.


For example, in 2008, the US subprime mortgage crisis triggered a global economic crisis. The Fed also adopted a policy of "spending water", which made US stocks out of an 11-year bull market since 2009. Now the Fed’s “no bottom line” rescue policy has directly reduced interest rates to zero, unprecedented in history, even more powerful than in 2008. Coupled with the US government’s $2.2 trillion rescue bill, it also promoted capital flows, which in turn pushed up stock prices.


Tech companies' revenue soars

Technology companies, especially the six major technology stocks Facebook, Apple, Amazon, Netflix, Microsoft, and Google, are all vested interests in the epidemic, and their stock prices have risen as a result. Among them, Amazon and Apple set their highest stock prices since February.


Market hype

In May, the unemployment rate fell, the manufacturing index rose, and the White House's confidence in economic recovery, under the market speculation, many investors tend to believe that the market is in a V-shaped recovery. Investors are not willing to miss the opportunity to enter the market while bargaining.

Apart from the fear of missing out on good opportunities, investors seem to have not many investment options in recent years. The yield on the 10-year US Treasury bond has been hovering at a low level for a long time, the bond market’s return rate has fallen, and the stock market has continued to rise, investors naturally don’t want to miss this opportunity.


Cause of the crash

Steve Massocca, managing director of Wedbush, believes that overvaluation is the main reason for the decline in technology stocks, but the second decline is only an adjustment.


In addition, many investors profit by selling at high prices. As long as they are investors who entered the market two weeks ago, they still enjoy profits on the books, so you may wish to sell a part first to get back part or all of the cost. If the stock price in your hand has doubled, you will get all the cost back if you sell half of it, and the remaining cost will be zero. If the stock in your hand has doubled, then selling one-third of the cost has been paid back Up. The current adjustment is that a large number of investors who have already made profits on the books are selling arbitrage.


Tech stock bull market is expected to continue

There are opinions that the Nasdaq has outperformed recently and it is very likely to repeat the mistakes of the 2000 U.S. "Tech Internet bubble". In the millennium technet era, news of big companies buying technet companies and auctioning 3G licenses flooded the market almost every day. At that time, many companies boasted that they were Kewang companies just because they had their own websites, and they had no actual technical support. Compared with today's Kewang technology, they were far from the same. In addition, these companies are not actually profitable, so the bubble burst is very reasonable.


However, compared with this bull market in technology stocks, the mainstream market believes that the strength of new economic stocks is solid and the potential is still great. The current environment is still favorable to the stock market, because the Fed's low interest rate is maintained for at least one year, which is favorable for capital to flow into the stock market. Coupled with the brilliant performance of US corporate financial reports, the proportion of in line with expectations is as high as 84%. The financial reports of most of the technology companies were even better than expected. With the product upgrade and transformation and the launch of 5G in the second half of the year, it is believed that the bull market in technology stocks will continue for some time.

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