Tech stocks’ stunning run could soon come to an end, according to top RBC Capital Markets strategist Lori Calvasina.
“The tech trade in particular feels like it’s starting to run out of catalysts,” she told Bloomberg.
The sector has soared in 2023, with Meta and Nvidia already seeing their share prices double.
Tech stocks’ stunning run this year could peter out soon, and that will likely hinder the broader stock market from making any further gains before the end of 2023, a top-flight RBC strategist has cautioned.
“The tech trade, in particular, feels like it’s starting to run out of catalysts, and that has really buoyed the market,” the Canadian bank’s head of US equity strategy, Lori Calvasina, told Bloomberg TVon Thursday.
“I still like my 4,100 number at year-end,” she added, referring to her price target for the S&P 500, which would represent a drop of around 2% from the benchmark index’s current level.
Tech stocks have started 2023 with a breakneck rally, benefiting from the surge in demand for ChatGPT and other AI tech as well as traders’ expectation that the Federal Reserve will soon end its interest-rate hiking campaign.
That outperformance has helped to lift stocks more broadly, with just a handful of listed companies accounting for nearly all of the S&P 500’s returns. The index is up 9% in 2023.
Calvasina said she’s expecting a short-term bounce once the debt-ceiling standoff is resolved – but in the longer-term, she can’t see much upside for stocks the rest of the year.
“If you pull the debt ceiling as a risk off the table I think at the very least it is going to quelch some of the pessimism,” she told Bloomberg.
“Some of my models have pointed to upside of around 4,300 — I can get there from a valuation perspective and on one of my sentiment models in general, though I do feel pretty good about my base case of 4,100 on the S&P,” Calvasina added.
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