Nasdaq’s $1 trillion loss raises a bumpy road in 2022

Bloomberg – NASDAQ index The compound lost nearly $1 trillion this week After the pace of the rise in US bond yields surprised investors, exacerbating them The outlook for 2022 is volatile.

Makers of costly software, biotech, and newly minted stocks have all taken the brunt of the damage., while the exchange-traded fund ARK . innovation by Cathy Wood, Overgrown Names Model, decreased by 9%.

Nasdaq Complex (CCMP: IND) lost -0.13% on Thursday this Thursday Losses after the crash -3.34% which closed yesterday. Treasuries continued to sell, although the speed of overdrafts slowed as the 10-year rate approached 1.73%. Major indices remained lower and well below mid-December levels, when the violent inclination of the Federal Reserve sent markets volatility.

Higher rates reduce the present value of future earningsThis particularly affects stocks of high-value and fast-growing companies. Zscaler Inc. lost. and Datadog Inc. and Peloton Interactive Inc. and Crowdstrike Holdings Inc. Between 10% and 18% this week. Massive maps are also not saved: NYSE FANG+ is down 2.8%led Nvidia Corp. and Microsoft Corp.

Ben Lidler, global market analyst at EToro, said that while it is positive in 2022, the year will return less than 2021, with more volatility.

Tougher economic policy can lead to a recovery in value

Hedge funds, which spent the month of December dumping high-growth, highly rated stocks, They’re starting the new year off software and chip makers at an astonishing rate. In the four sessions until Tuesday, These sales reached the highest level in US dollars in more than 10 years, according to data compiled by the largest brokerage at Goldman Sachs Group Inc.

However, the correction may not be a reality. Tech stocks took a similar hit in March, but immediately rebounded then.

“It looks like the stock pullback is a bit out of reach,” strategists at UBS Global Wealth Management led by Mark Heffel said in a note. “Fed policy normalization should not affect corporate earnings growth expectations, which remain strong due to strong consumer spending, rising wages, and easy access to capital.”

With the help of Nikos Chrysoloras*

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This article was translated by: Myriam Salazar