Excitement for the bullish employment data appears to have faded a bit, with equity futures falling and investors looking for the next catalyst to drive this market higher. And in tune with what we’ve seen this year, technology is poised to lead the way south. Bahnsen Group Chief Investment Officer David Bahnsen believes the markets are halfway through a technological pullback, not heading for a “sudden and shocking 30%, 40%, 50% drop, but rather we hit a point , in an empirical and demonstrative way, which requires a price change “.
“” There is not enough momentum, there are not enough buyers right now that can support this level of valuation. “” – David Bahnsen, The Bahnsen Group
Take a little history as a guide to what can happen. Microsoft MSFT, + 2.77% took 16 years to reach new highs and Cisco CSCO, + 1.55% is not even close to its all-time high in 1999. “Intel INTC, + 3.08% is basically where it was 1999, and however, the three companies crushed it for the past 20 years, increased double-digit earnings per year for 20 years, “he said. “If stock prices didn’t move, that can only happen for one reason. Stocks were damned high. “The message for stocks investors love now: The popular FAANG (Facebook FB, + 3.43%, Apple AAPL, + 2.36%, Amazon AMZN, + 2.08%, Netflix NFLX, + 0.23%, Google GOOGL owned by Alphabet, + 4.19%) names and companies like Tesla TSLA, + 4.43% – is that they can continue to grow, succeed and be profitable, but valuations can normalize and share prices can “not go nowhere for a long time, “Bahnsen warned. One solution: Look at the old-tech stalwarts like IBM IBM, + 2.03%, Cisco CSCO, + 1.55% and Intel INTC, + 3.08%. literally stable cash that have call options on their future, “he said.” They have exciting new technologies that are not in the Netflix NFLX camp, + 0.23% and Facebook FB, + 3.43% and certainly not in the Tesla camp and Snowflake SNOW, -1.89%, but none of those companies can do anything they do without Intel processors, chips, servers, mainframe, hardware. ” “The technology infrastructure that we require is still dependent on Cisco, Intel and IBM,” he said, adding that patient investors who expect these stocks to pay off slowly are still getting decent dividends from them. Bahnsen is also important on the subject of suppressed demand for COVID-19 and believes that consumer staples are the most undervalued on the market. He owns Procter & Gamble PG, + 1.62%, Kimberly-Clark KMB, + 1.06% and Pepsi PEP, + 1.33% – three names that have yet to hit new highs continue to grow in both revenue and revenue, he said. Rejection of corporate taxes? US stock futures ES00, -0.20% YM00, -0.13% NQ00, -0.25% are falling after the Dow Jones Industrial Average DJIA, + 1.13% and S&P 500 SPX, + 1.44%, both posted all-time highs on Monday. European stocks SXXP, + 0.78% are catching up with Wall Street gains, while Asia was mixed, with China stocks falling after the central bank reportedly asked lenders to slow growth in loans. loans this year. Influential Democratic Senator Joe Manchin warned that the proposed corporate tax rate in President Joe Biden‘s infrastructure package is too high, and would increase it to 25%, but not the 28% that the bill calls for. The independent Senate MP ruled Monday in favor of a Democratic effort to pass more legislation through reconciliation, meaning the party could get more bills passed in the Senate this year. Swiss banking giant Credit Suisse CS, + 1.59% CSGN, + 1.13% will take a hit of $ 4.7 billion linked to the collapse of Archegos Capital Management. He also cut his dividend and announced that his heads of investment and risk banking will be leaving. Tween Roblox-centric social gaming platform RBLX, + 5.08% is in an industry sweet spot and Wall Street is catching on. Random reading Beyond the Milky Way is a group of blue stars hotter than the sun. A bitcoin revolution is taking place and MarketWatch is gathering a cast of crypto experts to explain what it all means. Sign up! Need to Know starts early and updates until the opening bell, but sign up here to receive it once in your email box. The e-mailed version will ship at approximately 7:30 am ET. Do you want more for the next day? Sign up for The Barron’s Daily, a morning investor briefing, featuring exclusive commentary from the Barron’s and MarketWatch writers