Morgan Stanley Suggests Rout in Expensive Tech Is Almost Over
- Yet the broad market may be more vulnerable to Fed anxiety
- ‘Rallies should be sold,’ say Morgan Stanley strategists
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The rate-induced selloff in hyper-expensive technology shares has almost run its course, if past shocks are any guide. The news for the rest of the market is less reassuring.
So reckons Morgan Stanley, which compared the carnage in tech that started in December to the five previous instances where rising Treasury yields sparked similar routs. In those, a basket of loftily valued tech companies tumbled a median 18% from peak to trough -- that’s at 15% now in the latest episode. The bank also plotted the S&P 500’s current performance against the earlier instances and says that at 2%, the latest decline is less than half what happened in the past.