An official with Guggenheim Partners opines that technology stocks will tumble further this year as investors flee to safety and buyers stay on the sidelines.
Guggenheim Chief Investment Officer Scott Minerd projects the NASDAQ Composite Index will probably drop below 3,800, sliding another 13%. The tech-heavy index already has fallen that much this year, closing at 4,363 on Friday, its lowest since October 2014. That’s more than 16 percent below the all-time high it reached in July.
"The market is repricing," says Minerd, "to absorb and reflect the uncertainty around earnings and the economy going forward."
NASDAQ growth stocks such as Amazon.com Inc. (NASDAQ: AMZN) and Netflix Inc. (NASDAQ: NFLX), the biggest gainers in 2015 on the Standard & Poor’s 500 Index, face new scrutiny amid doubts about their high price-earnings ratios and broader economic concerns, driven by China and oil.
Minerd predicted on Jan. 20 that the S&P index will decline to 1,650 this quarter, a forecast he maintains. The index has dropped 8% this year, closing on Feb. 5 at 1,880.
He also predicted last month that oil could fall as low as $25.00 U.S. a barrel before rebounding. He said he’s holding onto that forecast even after prices closed at $34.06 U.S. Friday, up from a low of $27.88 U.S. on Jan. 20.
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