What's Going On With Tech Stocks?

Technology stocks have been hard hit since Donald Trump won the race to the White House.

Cory Johnson was interviewed on Bloomberg TV and said "panic" is the wrong word to describe what is going on, but perhaps a "freak out" is more appropriate.

Johnson noted that many technology stocks, particularly the infamous "FANG" group, were very expensive heading into the election, so investors are now looking for any excuse to take profits off the table.

On the other hand, many investors could be working under the assumption that technology stocks won't perform as well under a Trump administration. One of the surprising reasons this may be so has to do with taxes.

Johnson explained that technology companies happen to pay the least amount of taxes out of all sectors in the S&P 500 index. Accordingly, a tax reduction will benefit technology companies less than it would other sectors.

"Just from a balancing standpoint you might want to own less tech in a broad-based portfolio," he said.

Johnson also noted that Trump's wishes to repatriate some or all of the trillions of dollars of cash American companies are sitting on overseas could provide only a temporary boost to shareholders.

Finally, Johnson argued that trade policies are the main overhang surrounding technology stocks as it's far from certain at this point of any renegotiating of existing trade deals would result in an incremental benefit to American companies.