The past few days have seen a phenomenal downturn in the markets with DOW, NASDAQ and S&P declining steadily. Ben Bernanke in his address to the Congress expressed worries about inflation and economy downturn. Other experts have also expressed varied concerns about declining economy. This hasn't helped the stock market at all.
The tech stocks are the worse hit. Apple (AAPL), Google (GOOG) and Research In Motion (RIMM) have led the tech decline. A few days ago these were the high fliers and absolutely nothing could have hampered the march of these stocks. I own all of these and I felt the same way too. But once CSCO came out with 'not so good earnings and even worse guidance', the downfall of the entire tech sector began. In a dramatic reversal of fortunes, the three strongest tech companies shed several points, sending a wave of fear among investors. Thursday turned out to be one of those worse days for stocks like AAPL, GOOG and RIMM. People were hoping that Friday would be better. Oh boy, were they in for a rude shock! Qualcomm lamented about a weak forecast and tech bellwethers plummeted further. Wachovia and Barclays Plc reignited concerns about collapsing value of debt securities and subprime loan losses, sending jitters among the investors. The huge sell-off continued and the market kept dropping, NASDAQ being hit the hardest.
So, what's going to happen in the next week or few weeks from now? Will the market rebound? Will the tech stocks recover? I wish I knew the answer to these questions. I really do. Unfortunately, the situation still looks bleak and all indicators seem to be pointing towards further market deterioration. I have a feeling that many tech stocks (RIMM, GOOG, AAPL included) have started to get oversold. Of course they will bounce back. The question is when? The market sentiment is amazingly negative and bearish. How do you explain a 1.44% drop for a company like Nvidia (NVDA) who reported awesome earnings and a brilliant guidance? If CSCO and QCOM led to the NASDAQ decline, why didn't Nvidia's earning reports help propel NASDAQ? It seems as if investors are completely ignoring positive news and literally waiting for more negative news.
Big Institutional investors and fund managers seem to be on a profit taking spree. I am hoping that we have hit the bottom for some of the tech and financial stocks or at the very least hit the bottom soon. Next week is also the Option Expiry week which might lead to a further decline, hopefully a very small decline. The tech sector needs one strong report from one of the tech leaders. Let's hope that Research in Motion can put NASDAQ in sixth gear when it reports it's earnings on December 20.
In my next post, I would like to mention the stocks I am looking at and why I think they should do well. These are just my thoughts and I consider myself a rookie investor (yeah, the blog title is just intended to make it look cool! Whizinvestors looks better than Rookieinvestors, right?!).
The tech stocks are the worse hit. Apple (AAPL), Google (GOOG) and Research In Motion (RIMM) have led the tech decline. A few days ago these were the high fliers and absolutely nothing could have hampered the march of these stocks. I own all of these and I felt the same way too. But once CSCO came out with 'not so good earnings and even worse guidance', the downfall of the entire tech sector began. In a dramatic reversal of fortunes, the three strongest tech companies shed several points, sending a wave of fear among investors. Thursday turned out to be one of those worse days for stocks like AAPL, GOOG and RIMM. People were hoping that Friday would be better. Oh boy, were they in for a rude shock! Qualcomm lamented about a weak forecast and tech bellwethers plummeted further. Wachovia and Barclays Plc reignited concerns about collapsing value of debt securities and subprime loan losses, sending jitters among the investors. The huge sell-off continued and the market kept dropping, NASDAQ being hit the hardest.
So, what's going to happen in the next week or few weeks from now? Will the market rebound? Will the tech stocks recover? I wish I knew the answer to these questions. I really do. Unfortunately, the situation still looks bleak and all indicators seem to be pointing towards further market deterioration. I have a feeling that many tech stocks (RIMM, GOOG, AAPL included) have started to get oversold. Of course they will bounce back. The question is when? The market sentiment is amazingly negative and bearish. How do you explain a 1.44% drop for a company like Nvidia (NVDA) who reported awesome earnings and a brilliant guidance? If CSCO and QCOM led to the NASDAQ decline, why didn't Nvidia's earning reports help propel NASDAQ? It seems as if investors are completely ignoring positive news and literally waiting for more negative news.
Big Institutional investors and fund managers seem to be on a profit taking spree. I am hoping that we have hit the bottom for some of the tech and financial stocks or at the very least hit the bottom soon. Next week is also the Option Expiry week which might lead to a further decline, hopefully a very small decline. The tech sector needs one strong report from one of the tech leaders. Let's hope that Research in Motion can put NASDAQ in sixth gear when it reports it's earnings on December 20.
In my next post, I would like to mention the stocks I am looking at and why I think they should do well. These are just my thoughts and I consider myself a rookie investor (yeah, the blog title is just intended to make it look cool! Whizinvestors looks better than Rookieinvestors, right?!).
3 comments:
Good summary of the ugly experiences that stock market gave us last week. It is very hard to know which direction the market will go, but keep up your good research and hopefully everyone will come ahead in months to come.
Good Luck,
Meet
Maybe the market needs to correct by about 10%, make a base, and then go higher in the first few months of the new year. I also just shorted HSBC today, thinking that some more bad news will come out of this sub prime mess before its all over.
I don't think there is any end in sight for the rollercoaster ride that the market has become. And the uncertainty that comes with a presidential election does not help matters. I believe we are at the end of the beginning of a global economic transition. If the transition holds, then the US economy will continue to degrade to the benefit of economic engines in Europe, India, and of course China. I truly hope that I am wrong, but the question is how long it will take before these economies think they are well enough coordinated and well enough situated among themselves that can do without the US dime.
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