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Analysts discuss why the tech slip is nothing to worry about

By dailymail / Published on Friday, 16 Jun 2017 00:08 AM / No Comments


The Dow closed lower as shares of major tech stocks like Facebook, Amazon, Apple and Netflix all fell, while Snap shares slipped and closed at its $17 IPO price.

But in regards to the broad market shifts, Meridian Equity Partners’ Senior Managing Partner Jonathan Corpina attributes the recent moves to recent worldwide headlines.

“At this point, look at the participation we’ve seen in the market, S&P, DOW, up about 8.5, 9% for the year,” Corpina told CNBC’s “Closing Bell” on Thursday. “Investors have a reason to pause at this point right. We talk about the Fed. We talk about North Korea. We talk about investigations into the Trump presidency and election process. Investors are not fully scared away from that, but it gives them a reason to take a step back.”

Corpina specifically describes how uncertainties in the Trump presidency have influenced the market’s behavior.

“I don’t think we’ve had a presidency where our markets have watched headlines come out of Washington so much, and the headlines that have come from Washington have been so gray and uncertain,” Corpina said. “So as we get to the end of the month here, the end of the quarter, investors are going to feel a pause in the market, a reason to move away.”

While some investors have seen the tech slip as a reason for concern in the markets, Riverfront Investment Groups’ Chief Market Strategist Kevin Nicholson dismisses it as a “minor” blip.

“When you look at what tech has done this year versus the S&P, it’s outperformed the S&P by almost 9%. So having a pullback like you’re seeing today is only very minor,” Nicholson said. “You have the big five names out there that have, you know, gotten a little bit ahead of themselves.”

As for Snap, Destination Wealth Management CEO Michael Yoshikami said he thinks the company needs to focus on user growth and monetization before it becomes a worthy investment.

“With Snap, it comes down to two things: Can they grow the user base and monetize their user base without alienating their current user base?” Yoshikami said. “I think it’s very debatable, it’s a work in progress. Personally, I think that Snap is a name that’s speculative. Its not an investable name.”