Thorough diligence between good and bad performing tech stocks and
hedging positions with the Nasdaq 100 Trust Shares (QQQQ) exchange traded fund is important today given a current trend of negative earnings surprises and
declining earnings and economic growth forecasts.
Technology’s rally in August is surprising given its deteriorating earnings outlook. After reporting earnings growth slightly below estimates the two prior quarters, technology earnings showed a strong negative surprise last quarter – growing only 9% versus an estimate of 15% at the beginning of the quarter.
This quarters forecast has fallen from 10% to 5% and the fourth quarter forecast is down from 11% to 9%. Given this projected earnings weakness, we see more near-term trouble ahead for tech stock prices.
For an in-dept Tech analysis click here
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Yaser Anwar is a guest author at ETFtrends & the editor of Investment Ideas by Yaser Anwar blog.
The author of this article is not a registered financial advisor &
does not give investment advice. This article does not comprise any
solicitation to buy or sell securities, ETFs or other investment
vehicles.