October continues to roil U.S. stocks with the technology sector, in particular, receiving the brunt of the punishment as the S&P 500 followed the Nasdaq Composite into correction territory on Friday. While investors are seemingly running for the exits, Canadian businessman and “Shark Tank” television personality Kevin O’Leary views the latest market correction as a walk in the park or more specifically, the garden.
“I’m bullish that the American economy is strong and this (correction), too, will resolve itself,” said O’Leary. “To me, this is a garden variety correction. It could correct as much as 22 to 25% and if you can time the market, great.”
The Nasdaq Composite fell over 200 points Friday as the once-heralded FANG (Facebook, Apple, Netflix, Google) stocks that helped to spark the decade-long bull run continued to sell off. After the markets closed on Thursday, Amazon reported better-than-expected earnings, but shares of the online retailer fell after hours by as much as 8% and another 8% to start Friday’s trading session.
Amazon’s earnings per share came in at $5.75 versus forecasts of $3.14, but revenue generated came in at $56.6 billion as opposed to the estimated $57.10 million expected by analysts. Adding fuel to the revenue miss flame was a weaker-than-expected fourth-quarter guidance, which came in between $2.1 billion and $3.6 billion–under the $3.8 billion estimate.
Related: S&P 500 Follows Nasdaq into Correction Territory as Tech is Trounced
As for Netflix, its third-quarter revenue came in exactly at the estimated $4 billion expected per a Refinitiv consensus estimate, but bested earnings per share (EPS) estimates of 68 cents with 89 cents for the third quarter. Furthermore, subscriber additions came in at 6.96 million with domestic subscriber additions reaching 1.09 million versus 673,800 estimated, and international subscriber additions reaching 5.87 million as opposed to the 4.46 million estimated.
Google parent company Alphabet posted revenues of $33.7 billion–a 21% year-on-year increase, but still fell short of forecasted revenue of $34.05 billion. As a result, Alphabet stock fell by about 3.3% in the hours after it announced its earnings and fell another 3% in Friday’s early session.
Facebook is the sole company from the FANG stocks who has yet to report their latest earnings. They are scheduled to release their fiscal year fourth-quarter results on October 30.
As the U.S. indexes continue to see mostly red through October, the majority of investors might view it as a stop sign, but to O’Leary, he has the green light to continue purchasing.
“I’m just adding to my positions,” said O’Leary. “I did it again today.”
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