After the recent sell-off of some of the world's largest technology companies, there has been a lot of bargain buying, NASDAQThe 100 index rose for the third day in a row.
According to Vanda Research, retail investors bought an average of $1.2 billion a day this week, surpassing the daily average of $1.05 billion in 2021; large technology companies and exchange-traded funds with large positions accounted for the majority of buying, according to analysts Ben Onatibia and Giacomo Pierantoni.
For Garrett Melson, a strategist at Natixis, technology companies are still attractive and ready to demonstrate their profitability. "people still underestimate how strong their growth is. Technology is the engine of long-term market growth and will continue to do so in the long run. "
The Nasdaq 100 index peaked on September 7. With the recent rise in Treasury yields putting pressure on growth stocks, the market capitalization of the top five U.S. technology companies lost nearly $900 billion after Monday's plunge. However, the index then rebounded, rising nearly 3% in three days, including Amazon.Com Inc(AMZN.US) and Apple IncThe FANG+ index of the New York Stock Exchange, including AAPL.US, surged 2.8 per cent on Thursday.
However, some analysts remain concerned that the market will be less enthusiastic about the technology industry, which was driven by soaring share prices during the severe epidemic. As the economy grows, many traders tend to look for stocks that benefit most from the rebound in economic activity, and interest rates are likely to rise as the Fed prepares to phase out its stimulus measures.
"We have experienced a long period of excellent performance of large-cap stocks, and I think this situation is coming to an end," said Ryan Jacob, an Internet fund manager at Jacob. "one of the reasons these large stocks are doing so well is that we have been in an environment where interest rates have generally fallen over the past 11 or 12 years, but it seems that the environment is changing." He said his portfolio had been skewed towards small and medium-sized stocks, whose faster growth would better make up for higher interest rates.
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