A Major Sell-Off for Tech Stocks?

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Wall Street is now convinced that rate cuts will not happen in March, as several Fed officials followed Fed Chair Jerome Powell’s messaging that rates will be higher for longer. Fed Bank of Cleveland President Loretta Mester expects the first rate cut to happen “later this year” if the economy behaves the way she expects it to. Her Minneapolis counterpart Neel Kashkari was optimistic about the progress on inflation but still wants to see more progress. - “The Fed expects to cut this year, but not right away,” said Chris Low at FHN Financial. Chris Low at FHN Financial (Photo: Bloomberg) The stock market is heavily skewed toward technology stocks that some analysts warn of a major pullback if there’s any selloff in that sector. Options wagers on declines in Nasdaq 100 futures have been virtually nonexistent, indicating an extremely bullish level for the tech-heavy benchmark index. Citigroup’s Chris Montagu sees a risk of “a turn in the market” if the tech sector sells off over the next few weeks. - “The large consensus positioning is a risk that could amplify a turn in the market,” Citigroup strategists led by Chris Montagu wrote. The struggles continue at Snap: The social media app had a rough earnings report, as the stock plummeted by 30% in extended trading after issuing guidance that was below Wall Street expectations. Snap blamed the conflict in the Middle East as a key contributor to its lower-than-expected revenue guidance, saying that the conflict will be a “headwind to year-over-year growth of approximately 2 percentage points in Q4.” Moreover, Snap already announced that it would cut 10% of its global workforce earlier this week, adding to its previous layoff of 20% of its fulltime workforce back in mid-2022. What makes it more painful for Snap is that its ad business is growing much slower than Meta, Amazon and Alphabet. These Big Tech companies had double-digit growth rates in their advertising businesses, but Snap and Pinterest struggle in this space. (Photo: Joe Scarnici/Getty Images) Ford expects a big year: Ford beat on revenue and earnings expectations and issued strong guidance that was way above Wall Street’s forecasts. The carmaker expects an adjusted EBIT of between $10 billion and $12 billion, while analysts forecasted just between $9 billion and $11 billion. As a result, the stock jumped by about 7% after the bell. Buy This “Forever” Stock And Hold For A Decade Today’s Stock Pick: Accenture Plc ([ACN]( Accenture is as solid as any stock pick you can make. It is one of the world's largest IT service companies with IT professionals (based in 50 countries) offering a wide range of services to approximately 7,000 clients across 120 countries. Most of those clients are Fortune 500 and Fortune 1000 companies. And there are two words to describe Accenture: steady grower. Between 2016 and 2022, Accenture's annual revenue rose at a compound annual growth rate (CAGR) of 10%. Obviously, it is not a dizzying growth. But it’s all about shareholder returns where Accenture has returned 16% compound annual total return to shareholders over the last five fiscal years: (Source: Accenture) Returns, returns, returns: Accenture knows how to make money effectively. Its return metrics are dream-like with ROIC consistently posting above 26% in the last eight quarters. Return on equity had a similar metric. Return on Assets was way above the standard of 10% or better with a 14% ROA. (Source: Accenture) What does this hint at? Extraordinary shareholder returns. Indeed, Accenture loves to reward shareholders through dividends and share repurchases. Dividends grew 10% CAGR over three years, and share repurchases jumped by 15% three-year CAGR. What’s more, Accenture recently raised its quarterly dividend to $1.29 per share in December – a 15% jump over the quarterly dividend rate in fiscal year 2023. (Source: Accenture) Your current dividend yield would be about 1.41%, and that would grow bigger if you hold the stock for a decade. You can easily see as high as 10% return from dividends alone. Bottom line: Nearly every major corporation is looking to digitalize its operations. Go digital or die. Therefore, Accenture plays in a hot industry, and its business stability offers you a safe annual return. It is not an exciting stock, but you can count on a double-digit percentage return per year. [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!](       © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](