Next week could be crucial for tech investors looking to re-enter the stock market, according to the investment director at Swiss fund manager GAM. Julian Howard, director of multi-sector investment at GAM, said the week starting December 12 would be a “super week for a potential inflection point” in tech stocks. Several macroeconomic data are scheduled to be released next week, including US inflation. The consumer price index, a broad measure of the cost of goods and services, will be released on December 13. “If we get an easing headline from the US CPI from this point, then I think it will look more like a trend,” said Howard, who manages more than $2 billion at GAM. “Once we get the hope that inflation will moderate, the Fed can take its foot off the gas.” The US Federal Reserve has raised interest rates to a range of 3.75%-4% and is expected to raise another 50 basis points later this month. Meanwhile, the annual inflation rate appears to be on a downward trajectory after it fell to 7.7% in September from 8.2% in October. When asked on “Squawk Box Europe” where investors should look to put their money, Howard said that “it has to be big technology.” The tech-heavy Nasdaq Composite is down 25 percent this year as the Federal Reserve has raised borrowing costs. However, these stocks are set to benefit if the Fed eases its tightening, Howard said. “I think that [The Nasdaq] Once we get some relief, it could come back very, very nicely,” he added. He described Big Tech as “the epicenter of interest rate uncertainty because it owns the types of long-term earnings that are the most sensitive.” Not everyone shared But that view does. According to Ben Jones, director of macro research at Invesco, the Nasdaq’s “legendary” 9.1% gain over the past month is unlikely to last. “I think this is a bear market rally,” He said Jones expects stock markets to fall further in the first half of 2023 after companies reported lower earnings. He said the real economy has not yet felt the “magnitude and speed” of interest rate hikes this year. But when the impact of the rate rise is seen, companies will begin to report lower earnings as the economy contracts, according to Jones. “Think we’re in a position or price at this time.”
