Given that tech stocks were the hardest hit in the current bear market, it is no wonder they led the recovery on Thursday. One economist, at least, is not happy about investors flocking to tech stocks in droves.
What Happened: Peter Schiff, who bats for gold but bashes Bitcoin BTC/USD, said he didn’t understand the logic of investors rushing into tech stocks on Thursday, especially as most of these companies continue to bleed money.
Apple Inc. AAPL led the gains on Thursday, as Cupertino's market capitalization swelled the most in a single day. Chipmaker Nvidia Corp. NVDA, which recently launched a new chip to bypass export restrictions to China, jumped 14.33%. Peer Advanced Micro Devices Inc. AMD also rose by almost a similar magnitude
Reflecting the buoyancy in the tech space, the Nasdaq Composite Index rallied by 7.35%, outperforming the S&P 500 Index and the Dow Industrials.
“Higher inflation is here to stay,” the chief economist and global strategist of Europac.com tweeted. Schiff is of the view that even if the Fed pivots, either to avert a financial crisis or in response to one, the tech bubble won’t be reflated.
Instead, he recommends buying dividend-paying and value stocks.
Schiff explained the logic behind his expectation of inflation remaining stubbornly high in another tweet. He noted that the U.S. Dollar Index has pulled back about 5.5% from its September high. The stronger dollar has thus far softened the blow dealt by inflation.
“But now that the dollar is weakening, it will intensify the rise in consumer prices, especially given our heavy reliance on imports,” he said.
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