Tech and megacap growth stocks are selling off at the fastest pace since the dotcom bust of 2000 when compared with cheaper companies such as banks and energy firms that pay higher dividends.Investors are cooling on stocks whose earnings prospects are far off in the future — a future made all the more uncertain after prices rose more than expected in April, keeping inflation near a 40-year high. Add a more aggressive policy response by the Federal Reserve and a possible recession and all the ingredients for a deeper tech bust are lining up.“This CPI print was perhaps the most eagerly anticipated in recent history, particularly for growth investors with high duration names forming the bulk of their portfolios,” said Lewis Grant, a senior portfolio manager at Federated Hermes in London. It “would not have been welcome news.”
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