Stop chasing the rally in tech stocks because high interest rates and weak earnings are coming to bite, says a top BlackRock iShares strategist
Investors should take their profits on tech stocks and exit the sector as earnings prospects grow dim and the Federal Reserve may dash market hopes of a softer interest-rate policy, according to a top BlackRock strategist.
But according to Chaudhuri, those gains are unlikely to last."The tech sector, with its high growth rates, is particularly sensitive to rates and so we expect these recent gains to be transitory," she said in a note. But that's no reason to think the US central bank will start loosening its monetary policy, according to Chaudhuri."The market is listening to what the Fed doesn't say rather than what it does, but doing so risks mistaking the Fed's desire to preserve optionality for an implicit intent to cut," Chaudhuri said.
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