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John Authers

Big Tech Stands in the Way of the Next Bull Market

The sector is stuck in a downward trend as almost never before, and it’s not clear what would reverse the trend. Plus, what it would really take to bring inflation down, an update on Brazil and the World Cup.

Tech stocks have tumbled and can’t get up.

Tech stocks have tumbled and can’t get up.

Photographer: Sean M. Haffey/Getty Images 

As market watchers move on to obsess about 2023 corporate earnings, it still looks as though estimates are too high despite a series of revisions lower in 2022. Many Wall Street prognosticators are labeling analysts as “delusional,” including Lisa Shalett of Morgan Stanley Wealth Management. It’s unrealistic forecasts that lead to the unexpected misses that ultimately drive stock prices lower. 

Yet, if there’s one sector that’s been hard to predict, it’s big tech. And a massive amount is at stake. Following mostly disappointing third-quarter earnings and guidance, the group last month was caught in a selloff that wiped out as much as $370 billion of value. The sector, which was a popular place for traders to invest in during the pandemic, continues to weigh heavily on the broader market with Inc, Tesla Inc. and Facebook parent Meta Platforms Inc. among the quarter’s biggest losers.