Analysts at EM Braxton Universal believe that a tech correction is inevitable, the only uncertainty lies in the timing of the correction and the extent of collateral damage that will occur.
Unlike previous drawbacks in which dip buyers flood the market swiping up low-priced stocks, this time investors are hesitant to buy in given the widespread speculation that the Fed will soon raise interest rates to combat inflationary pressures.
Analysts at EM Braxton Universal expressed that the notion among investors of an inevitable rate hike grows clearer each day, as inflation persists, and hot wage numbers fly out of the banks.
In sharp contrast to a recent Nasdaq slump, Treasury yields posted lofty gains, with the 2 year yield (assumed as a gauge of where the Fed will set short-term borrowing rates) surpassing 1% for the first time since February 2020. This supports EM Braxton Universal’s predictions, that the bond market is pricing in anticipated aggressive policy tightening by the Fed, which will surely lend to lower valuations as growth likely slows as the Fed endeavors to dampen the pace of demand.
Analysts at EM Braxton Universal postured that this will see to an exodus from growth tech stocks, in favor of more reliable value stocks that have been gradually stabilizing and strengthening.
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