Tech stocks are the new 'safety trade' amid banking jitters: Wedbush

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Tech stocks are the new 'safety trade' as the banking turmoil stokes market volatility, a Wedbush analyst says

Tech stocks have staged quite a comeback this year after a dismal 2022, mainly on the prospect that the Federal Reserve may be close to ending its interest-rate hikes. The rally may have a lot more to run, according to Wedbush Securities' Dan Ives.

Tech stocks still have a"nice upside," according to Wedbush's Ives, who reiterated the firm's start-of-the-year forecast for an advance of more than 20% for the asset type in 2023. And that means tech shares may even gain the status of a safe haven for investors spooked by the recent volatility in other assets thanks to the banking turmoil that erupted earlier this month, according to him.

An end to rate increases would be positive for tech stocks, as rising borrowing costs tend to weigh on such businesses' future earning potential and, in turn, valuations.

 

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