|Russ Koesterich, CFA – Blackrock
What’s behind the tech selloff
Summary: The continuation of the bull market has many investors feeling like everything is calm in the market, but under the surface, things may be starting to churn. Koesterich lays out three reasons for the recent tech selloff. One, there was an abrupt reversal of this year’s momentum trade. Tech has become a momentum play like in the late 1990s. Two, multiples are much higher. At nearly 25x trailing earnings, the sector is the most expensive it has been since the financial crisis. Lastly, the surge in growth equities has made the entire style expensive.