Speaking to the website "Sky News Arabia economy" Economist Ali Hamoudi says: "Markets expect an 86% chance of a 1% rate hike in the Federal Reserve by June of 2023, and at the same time, most investors expect earnings to decline. "Standard & Poor’s 500" by 1.7 percent in the fourth quarter of 2022, with a rise of only 1.7 percent in the first quarter of 2023.
The idea of technology companies continuing to achieve 200 percent profits year after year, as they did in 2020 and 2021, has ended, so we can say that the technology asset bubble has burst, and that many popular technology stocks have now fallen by rates ranging between 50 and 90 percent. It is not over yet, according to Hamoudi.
Al-Hamoudi confirms that the technology sector has actually entered into stagnant profits, with growth slowing down significantly, and he believes that more pain awaits the technology sector in the next year, but at the same time he indicates that there are good opportunities for buying among individual stocks in the technology sector, provided that investors have the ability to Patience and extreme selection in the investment process.
For his part, economist Waddah Al-Taha explains that "Technology shares in US markets During the year 2022, it suffered from significant declines, as the share price drop sometimes exceeded 60 percent, as happened in "meta"the parent company of"Facebook"And even with the slight rebounds that occurred, the prices are considered low, despite the fact that these companies are giant and influential in the American markets".
Al-Taha added in his interview with the website "Sky News Arabia economy" Expansion processes resulting from innovative products, initiatives, or programs usually lead to increased revenues and attractive stocks, but low prices may also make prices attractive in the event of a somewhat optimistic outlook in 2023.
Among the factors that can be considered positive for technology stocks in 2023 is that corporate profits remain remunerative, and that the rates of increase in interest rates are less frequent than the rates of increase that occurred in 2022, in which we witnessed four increases of 75 basis points, according to Taha, who is likely to be The pace of increase is lower next year.
But if the stock levels remain low, according to Waddah Al-Taha, this may prompt the companies’ management to send a strong message to investors that these shares are worth more than their market value, by buying back their shares, especially those companies that have excess liquidity.
In turn, Ashraf Al-Aydi, CEO of the company, points out "Intermarket Strategy" to site "Sky News Arabia economy" He indicated that evaluating the performance of technology companies for the next year depends on three factors, the first of which is the reality of the US economy, the second is the state of restrictions and closures in China, and the third is bond yields, noting that the end of the closures caused by the pandemic helps Chinese factories on which technology companies depend, and that bond yields remain high will increase. of the suffering of technology stocks.
Al-Aidi adds: "Any talk in the short term about easing the pace of interest rate hikes will help technology stocks and stocks as a whole, but the economy is expected to enter a recession next year, and therefore companies that will have greater resistance to recession and inflation such as "Johnson & Johnson" And "Procter & Gamble" Even cigarette and tobacco companies such as "Philip Morris" as well "Pepsi-Cola" And companies that manufacture foodstuffs and cleaning materials in general will overtake technology companies in 2023".
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And the shares of the largest technology companies recorded during the year 2022 a significant decline that they had not witnessed in two decades, as a result of tightening the monetary policy of central banks and raising interest rates To confront inflation, which changed the attitudes of investors and made them look for investment in “hot money” or the so-called investment in interest rates, in order to take advantage of the high benefits, which led to a decrease in the luster of investment in technology companies such as “Meta” and “Camel” And”Amazon” And”Netflix” And”Alphabet“.
Speaking to “Sky News Arabia Economy”, economist Ali Hamoudi said: “The markets expect that there is an 86 percent chance of raising the federal interest rates by 1 percent by June of 2023, and at the same time, most investors expect the profits of the “Standard” index to decline. & Poor’s 500, down 1.7% in the fourth quarter of 2022, with a rise of just 1.7% in the first quarter of 2023.
The idea of technology companies continuing to achieve 200 percent profits year after year, as they did in 2020 and 2021, has ended, so we can say that the technology asset bubble has burst, and that many popular technology stocks have now fallen by rates ranging between 50 and 90 percent. It is not over yet, according to Hamoudi.
Al-Hamoudi confirms that the technology sector has actually entered into stagnant profits, with growth slowing down significantly, and he believes that more pain awaits the technology sector in the next year, but at the same time he indicates that there are good opportunities for buying among individual stocks in the technology sector, provided that investors have the ability to Patience and extreme selection in the investment process.
For his part, economist Waddah Al-Taha explains, “Technology stocks are in US markets During the year 2022, it suffered from significant declines, as the share price drop sometimes exceeded 60 percent, as happened in “metathe parent company ofFacebookEven with the slight rebounds that occurred, prices are considered low, despite the fact that these companies are giant and influential in the American markets.
Al-Taha added, in his interview with “Sky News Arabia Economy”, that expansions resulting from innovative products, initiatives, or programs usually lead to increased revenues and make stocks attractive, but a drop in prices to low levels may also make prices attractive in the event of an optimistic outlook to an extent. What in 2023.
Among the factors that can be considered positive for technology stocks in 2023 is that corporate profits remain remunerative, and that the rates of increase in interest rates are less frequent than the rates of increase that occurred in 2022, in which we witnessed four increases of 75 basis points, according to Taha, who is likely to be The pace of increase is lower next year.
But if the stock levels remain low, according to Waddah Al-Taha, this may prompt the companies’ management to send a strong message to investors that these shares are worth more than their market value, by buying back their shares, especially those companies that have excess liquidity.
In turn, Ashraf Al-Aidi, Executive Director of the “Intermarket Strategy” company, points out to “Sky News Arabia Economy” that the evaluation of the performance of technology companies for the next year depends on three factors, the first of which is the reality of the American economy, and the second is the state of restrictions and closures in China, and the third is bond yields, noting that the end of The closures caused by the pandemic help the Chinese factories that technology companies depend on, and that bond yields remaining high will increase the suffering of technology stocks.
And Al-Aidi adds: “Any talk in the short term about easing the pace of raising interest rates will help technology stocks and stocks as a whole, but the economy is expected to enter a state of recession next year, and therefore companies that will have greater resistance to recession and inflation such as” Johnson & Johnson “and “Procter & Gamble” and even cigarette and tobacco companies such as “Philip Morris” as well as “Pepsi-Cola” and companies that manufacture foodstuffs and cleaning materials in general will outperform technology companies in 2023.