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He noted that hyperscaler prices were revising, along with those of second- and third-tier players.
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The investment executive also said that even as Treasury yields rise, markets will broaden.
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Freedman added that Nvidia’s earnings results next week and Anthropic’s upcoming public listing will impact markets in a big way.
A recent selloff in technology stocks, spurred by the Democrats winning both chambers of Congress and the recent Nvidia Corp. (NVDA) scandal, has prompted Eric Freedman, Northern Trust Wealth Management’s Chief Investment Officer, to believe it is still advisable to stay invested in the stock market and in technology names.
In an interview with CNBC, Freedman called Wednesday’s green reversal in stocks a “big sigh” of relief for markets, reiterating his optimism.
Why Markets Should Stay Long On Technology Names
“I think you look at the financing. Scott, it just continues. Everyone says, hey, this web of, you know, let’s call it shadow financing, is going to at some point break. Until it does, we still think the bias is higher,” Freedman said.
He noted that hyperscalers’ prices were revising, alongside those of second- and third-tier players. “It just continues to be better. So again, we think this is still a market you have to own until you’re proven otherwise,” he said.
The investment executive said that even as Treasury yields rise, markets will broaden.
“We do think the bias for rates is probably slightly higher. But again, we would really favor tech. You do think things like RSP, things that are taking that more equal-weighted opportunity set, we think, are still a worthwhile thing for clients,” he added.
Markets Will Depend On Two Key Events
Apart from the recent relief rally, Freedman said that the turn that Nvidia takes following its earnings results next week, as well as the upcoming public listing of Anthropic, will impact markets in a big way.
“So again, the ecosystem, we still think, has that bias towards more demand versus supply.”
“Again, if there’s a kink in the armor, if you will, from the Nvidia report suggesting that maybe supply is even further delayed out in the future, that would be problematic. But again, we still think that bias is higher for tech. And you make more of a positioning issue than anything else,” he said.
How Are Markets Reacting?
The SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down 0.47% at the time of writing amid ‘bullish’ sentiment.
