Dusseldorf The first signs of stabilization have just appeared on the US stock market when the crash in Snap shares sends a new shock wave through the markets. Social media stocks like Twitter, Meta and Pinterest collectively lost as much as $165 billion in value on Tuesday.
The technology exchange Nasdaq has now recorded losses for seven weeks in a row. It has lost about 29 percent since its last all-time high in November 2021. “That’s significantly more than the S&P 500 and the leading index Dow Jones – such losses were last seen when the tech bubble burst in 2002,” says Wall Street expert Astrid Dörner in the podcast Handelsblatt Today. Together with financial editor Andreas Neuhaus, she analyzes the problems of tech companies in today’s episode.
Buy tech stocks now or go defensive?
The mood on Wall Street is correspondingly clouded: many analysts and economists are assuming further losses. JP Morgan’s chief economist speaks of a “wealth shock” that has already cost Americans $5 trillion and could grow to $9 trillion by December.
One reason for this: According to Neuhaus, investors are increasingly focusing on more defensive stocks. Although many companies have not done that much with the last figures, they are now evaluated completely differently. It’s up to the US Federal Reserve. The Fed is raising interest rates to curb inflation in the US. A bad prerequisite for tech companies, explains Neuhaus: “They often don’t finance the growth from their own business, but on credit. High interest rates mean that they become more expensive and profits fall.”
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But is now the right time for investors to invest in the industry? The two editors see it differently: Neuhaus currently sees entry opportunities in certain tech stocks, while New York correspondent Dörner believes that prices will continue to fall. You can hear the reasons for this in today’s episode of Handelsblatt Today.
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