Nobody should be surprised by the recent pull back in the market, driven by decline the stock price of major tech names. After all, this move has in the making for a while.
The rationale for institutional investors parking their money in the tech names was: “Well, interest rates are low…so where else should we put the money to get yield?”
With the Fed pumping huge amount of liquidity into the markets and higher than usual savings in the U.S. households, inflation slowly started raising in 2021, and more recently bond yields followed.
Have we reached the bottom? Who knows…if I wanted to speculate, I would say probably not, as S&P has had a bullish streak (more or less) since 2018 and this is very rare.
