Technology stocks will tumble further this year as investors flee to safety and buyers stay on the sidelines, according to Scott Minerd, chief investment officer for Guggenheim Partners LLC.
The Nasdaq Composite Index will probably drop below 3,800, sliding another 13%, he said. The tech-heavy index already has fallen that much this year, closing at 4,363 on Friday, its lowest since October 2014. That’s more than 16% below the all-time high it reached in July.
“The market sentiment is so bad,” Minerd, who manages about $240 billion, said Sunday in a telephone interview from Los Angeles. “The market is repricing to absorb and reflect the uncertainty around earnings and the economy going forward.”
Nasdaq growth stocks such as Amazon.com Inc. and Netflix Inc., the biggest gainers in 2015 on the Standard & Poor’s 500 Index, face new scrutiny amid doubts about their high price-earnings ratios and broader economic concerns, driven by China and oil.
LinkedIn Corp. plunged the most ever Friday on the New York Stock Exchange amid a wave of analyst downgrades after the company said its new business lines for sales and marketing tools aren’t going to grow as quickly as predicted. Tableau Software Inc., a maker of data-analysis and charting software, saw its value plummet by half Friday after falling short of fourth-quarter estimates, dragging down bigger software companies such as Salesforce.com Inc.
Minerd predicted on Jan. 20 that the S&P index will decline to 1,650 this quarter, a forecast he maintains. The index has dropped 8% this year, closing on Feb. 5 at 1,880.
