Why This Tesla Bull Says He Would Be 'Buying' Big Tech-Focused QQQ ETF Despite Market's Losing Streak

Zinger Key Points
  • Given the steep sell-offs, tech stocks could be ideal candidates for a strong rebound once the Fed begins to pivot.
  • With a higher terminal Fed funds rate priced in, time could be ripe for buying beaten-down techs, says Gary Black.

The Invesco QQQ Trust TSLA, an exchange-traded fund tracking the performance of the Nasdaq 100 Index, has pulled back about 29% year-to-date. Notwithstanding the market’s current losing streak, Tesla bull Gary Black said he would be a buyer of the ETF.

What Happened: The market has given back all of the gains since Fed Chair Jerome Powell’s Brookings’ speech on Nov. 29, in which he hinted at a potential pivot, the Future Fund co-founder said. The November producer price inflation report due on Friday, the November consumer price inflation report slated for Tuesday, and the Federal Open Market Committee decision scheduled for Wednesday may have “amply discounted” a 50-basis rate hike and peak fed funds rate well above 5% in 2023, Black said.

Market has now given up all the Powell pivot from his 11/29 Brookings speech. Nov PPI (Fri), Nov CPI (next Tue) and Fed decision (next Wed) are likely amply discounted for a 50bp rate hike and peak Fed funds rate well above 5% in 2023. I’d be buying QQQ here with 10yrTY at 3.53%. pic.twitter.com/IRUB0RppS1

Why It’s Important: Tech stocks have led the current market downturn, with big techs seeing steep sell-offs. Meta Platforms Inc. META is down about 66% year-to-date and Apple Inc. AAPL, often considered recession-proof, has shed about 19%.

The Nasdaq 100 Index, which the QQQ mirrors, tracks the performances of about 102 stocks of the largest non-financial companies listed on the Nasdaq.

Given these companies have strong fundamentals and the potential to come back up stronger, at current depressed valuations, they could be bargain buys.

Price Action: The QQQ edged up 0.01% to $281.70, according to Benzinga Pro data.

Read Next: 'Darker Macro' Awaits As Amazon, Google, Meta Forced To Cut Costs After 'Hypergrowth' Phase: Analyst Says What's Next For Tech Stocks

Market News and Data brought to you by Benzinga APIs
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorNewsFederal ReserveAnalyst RatingsTechTrading IdeasFuture FundGary BlackJerome PowellNasdaq 100 Index
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...