It’s probably a temporary phase, and no one seems to have a complete explanation as to why it’s happening, but technology stocks went down in value on the markets last week.
According to the experienced market analysts, tech stocks were among the big losers in a general downward trend seen in the US Dow Industrials stock market as well as Nasdaq, which is the tech-oriented stock market.
Among the most well-known tech companies affected was Alphabet, parent company of Google, which lost about 2.5 per cent of its share value. The decrease in this instance could – at least in part – be the result of the European Union’s demand that Google pays $2.7 billion in fines over its favouring of its own company over others.
Other big tech losers were Facebook, which lost around 2 per cent of its value, and Netflix, which was down just over 4 per cent.
The tech sector overall – denoted on the New York Stock Exchange by the letters, or ticker symbol, “XLK” – fell 1.6 per cent overall.
The Nasdaq Composite Index, or “COMP”, which includes a lot of tech companies’ shares, dropped 1.6 per cent as well.
All of this is probably only important if you were selling your shares last week, which would have meant you received less money in sales than you might have in other weeks.
The latest news is that tech stocks have made a bit of a comeback this week, with COMP up 0.7 per cent and the XLK having seen most of the selloffs which caused the downwards slide.
Every industry has its own jargon, and share-trading is no different. But the general gist of what they were saying is that the worst is over for tech stocks, and things are likely to be steady from now on.
A selection of quotes from CNBC illustrates the virtually indecipherable quality of the lingua franca of this sector.
John Traynor, CIO at People’s United Bank, said: “We don’t want to dramatically overweight the [tech] sector, but we still want to participate in it. You’re seeing some good top-line growth in these names.”
Katie Stockton, chief technical strategist at BTIG, said the Nasdaq 100 futures had taken a respite “from the pullback that has characterized the technology sector in the last two days”.
She added: “There is room to short-term oversold territory, so we would assume the pullback still has a hold, although it is likely to mature in the next few days.”
Mark Newton, managing partner at Newton Advisors, said: “The Tech selloff looks nearly complete in the short run with XLK … down to weekly support near trendlines from last November.”
Basically, tech stocks are not losing value as fast as they were last week, and things are more or less back to normal.