Chip Somodevilla
Deepwater Asset Management’s Gene Munster predicted difficult times for high-growth tech stocks in the first half of 2023, with an appearance by Federal Reserve Chair Jerome Powell and monthly jobs statistics potentially providing key catalysts this week.
However, in an interview with CNBC, the analyst added that he sees a “great year” for tech in the back half of 2023 and into 2024.
“I think what he [Jeremy Powell] learned with the last Fed meeting is that if he is not overly hawkish, the market tends to interpret any fractional positive news related to any sort of breaks coming up in interest rates. So, I suspect that he’s going to be pretty hawkish and I suspect that that’s going to kind of lay the groundwork for a selloff in tech,” Munster said.
Given the current market dynamics, the managing partner at Deepwater said he has 50% of his portfolio in cash and the other half invested in companies that have margin upside.
Longer term, Munster asserted that he is still “a big believer in tech,” with the sector likely to pose a substantial investment opportunity once the market gets through its near-term issues.
“I think the numbers have come down now. We’ve seen more modest growth rates, so that you just have easier comps, which sets up for, I think, a good investment period for tech,” he said.
Looking at the broader market action during Monday’s intraday session: S&P500 (SP500) (NYSEARCA:SPY) +0.4%, the Nasdaq Composite (COMP.IND) +0.5% and the Dow (DJI) +0.2%.
For more perspective on the possibilities for recession and inflation, see why Seeking Alpha contributor WYCO Researcher says, “Don’t Be Fooled By The Labor Market, We Are Headed Into A Recession.”
