From “Tech Shares Roil Market as Stocks Fall for Second Week” ($) in Saturday’s Wall Street Journal:
Gyrations in highflying tech stocks have injected volatility into the broader market, a rapid about-face after a summer where U.S. shares marched steadily higher. Shares of Apple, Facebook, Amazon.com, Microsoft and Alphabet fell 4% or more this week, weighing on the broader market.
The market’s climb over the summer has largely been fueled by a handful of tech companies that are expected to benefit from the stay-at-home economy created by the coronavirus pandemic. Their hefty gains also helped explain a divergence that many people struggled to understand: why the market was rallying when the economy was limping.
Investors abandoned the group this week, leading to big declines in some of the market’s favorite trades this year…
Still, some investors have pounced on the market selloff as an opportunity to load up on more stocks. With low yields around the world, there have been few attractive places for investors to earn high returns
“When I see selling in the marketplace, I ask myself: ‘Where else are these investors going to park their money?’” said Dev Kantesaria, a managing partner at Valley Forge Capital Management, which oversees about $1 billion in investments. “If you’re a long-term investor, you should be buying these growth stocks.”
My take: I blame the pandemic for the volatility. The tech stocks just took it for a ride. Next stop, the U.S. election.