This might be the drop that some analysts were waiting for. Aside from the Dow, the S&P 500 also slipped 3.5% while the Nasdaq Composite plunged 5% with the major tech stocks having their worst day since March.
Facebook, Amazon, Netflix, Alphabet, and Microsoft were some companies that contributed to the tech plunge. In addition, Apple and Tesla shares also slumped amid their stock split announcement this week dropping almost 10%.
Even the Stock Market Wizard and U.S. Investing Champion Mark Minervini was also expecting the stocks to drop beginning this month.
However, despite the U.S. markets showing short-term weakness, analysts viewed the sell-off as a constructive move. Bryn Talkington, managing partner of Requisite Capital Management told CNBC’s Power Lunch:
“I definitely think this is just a healthy pullback. I think this is just a reminder that gravity not only exists in nature, but it also exists in the stock market, and the Nasdaq needs to have a good 10% to 15% plus retracement.”
Jim Iuorio of TJM Institutional Services also told CNBC’s The Exchange that the Nasdaq correction is a market “whack-a-mole” with big names getting too far too fast.
Hou Wey Fook, chief investment officer at Singaporean bank DBS also viewed the U.S. stocks sell-off as “a nice, healthy correction” on CNBC’s Squawk Box Asia. He also suggested to his clients to have continued exposure to the tech sector since majority are transitioning into e-commerce.
As per the U.S. Labor Department, 881,000 people applied for state unemployment benefits last week plus an additional 759,482 initial claims for Pandemic Unemployment Assistance.
Investors shall see if the latest jobs report this week could either trigger a possible reversal for Nasdaq and the Dow Jones bouncing to new highs or a continuing downward onslaught.
Featured image courtesy of PopTika/Shutterstock
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