Strategist Ignores Tech Dip, Sees 7% S&P 500 Rebound

Strategist Ignores Tech Dip, Sees 7% S&P 500 Rebound

Strategist Ignores Tech Dip, Sees 7% S&P 500 Rebound

$DIA, $SPY, $QQQ, $VXX

A respected managed money strategist is not put off by the dip in technology sector and has raised his outlook.

RBC Capital strategist Jonathan Golub raised his price target for the S&P 500, citing improving profit growth and “reasonable valuations.”

His new market forecast is 2,600, representing 7% upside from Monday’s close.

Apple (NASDAQ:AAPL) and other technology stocks declined Monday, with the FAANG’s leader’s shares down as much as 7% in 2 days.

“We remain constructive on equities given the recent pickup in global activity, stronger EPS, and reasonable valuations,” Mr. Golub wrote in a note to clients Monday.

The NAS Comp marked it biggest 2-day loss since September. The Technology Select Sector SPDR ETF (exchange-traded fund) was down 1.1% Monday after having fallen as much as 2.2% last Friday its largest 2-day percentage decliner since September.

Investors rotating out of the growth sector and into value sectors of the market. Losses were contained by a continuing rebound in energy and bank stocks.

The overall equity market health is reasonably good because people are rotating out of tech stocks, money is not rushing out of stocks

Up nearly 14% since President Donald Trump’s inauguration in January, the tech sector of the S&P 500 had risen its most expensive since early Y 2008 in terms of P/Es (price to earnings) expectations.

Tech took over the market leadership from financials and other sectors that outperformed after the November 8 Presidential election on hopes that President Trump’s agenda of deregulation and tax cuts would benefit the sector.

Monday, the major US stock market indexes finished at: DJIA -36.30 at 21235.67, NAS Comp -32.45 at 6175.44, S&P 500 -2.38 at 2429.39

Volume: Trade on the NYSE came in at 951-M/shares exchanged.

  • NAS Comp +14.7% YTD
  • S&P 500 +8.5% YTD
  • DJIA+7.5% YTD
  • Russell 2000 +4.6% YTD
HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Bullish (0.44) Bullish (0.39) Bullish (0.42) Very Bullish (0.51)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Bullish (0.39) Bullish (0.32) Bullish (0.31) Very Bullish (0.54)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Bullish (0.25) Neutral (0.20) Neutral (-0.02) Very Bullish (0.58)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Bearish (-0.27) Bearish (-0.25) Bearish (-0.27) Bearish (-0.29)

Stay tuned…

 

 

 

 

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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