The second half of August has been bruising for technology stocks, but those hoping for a respite from the declines shouldn’t relax just yet: September is just around the corner.
The month historically has been the worst of the year for returns, suggesting another reason for caution as investors also grapple with inflation and rising interest rates from the Federal Reserve. Over the last decade, the Nasdaq 100 Index has declined by an average of 0.6 per cent during September, the only month of the year with a negative average. The tech-heavy index fell 5.7 per cent in the Septembers of both 2020 and 2021.
“You don’t want to blindly invest based on seasonality, but you shouldn’t ignore it, given how poor September typically is, especially for tech,” said Detrick. “The potential for more volatility seems quite high, and when you add in this downside seasonal trend, there’s plenty of risk for September.”
“Until we get past the Fed’s hawkish stance, which will be a long and slow process, I have a hard time seeing how we get a clear runway for a risk-on trade,” said Don Calcagni, chief investment officer at Mercer Advisors. “I suspect we’ve put in our lows of the year, but tech continues to trade at a pretty significant premium, and because of that, I just don’t think there’s enough appetite for it to come roaring back.
“The fourth quarter of a midterm year is historically very strong, so we could see some positive seasonal tailwinds toward the end of the year,” he said. “Meanwhile, tech earnings have overall been quite solid, so there could be some solid opportunities within the group when all is said and done.”The recent weakness in equities has been broad based, with almost 70 per cent of Nasdaq 100 components making new four-week lows.
Netflix Inc. hired two Snap executives to develop its global advertising strategy. Chief Business Officer Jeremi Gorman and Vice President of Americas Peter Naylor will begin their role in in September, Ad Age reported, without saying how it obtained the information. Onetime PayPal Holdings Inc. Chief Operating Officer David O. Sacks said he exchanged a few emails with investment bankers about possibly investing in his old friend Elon Musk’s Twitter Inc. acquisition but never became involved in the proposed deal.
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