[The Epoch Times, February 22, 2022](The Epoch Times reporter Zhang Dongguang comprehensive report) Under the circumstances that the United States is about to raise interest rates and the turmoil in Ukraine is still unable to end,US stocksThe performance this year has been poor. The Dow has fallen 6.22% so far, the S&P 500 has fallen 8.76%, the Nasdaq has fallen 13.4%, and Philadelphia Semiconductor has fallen 14.2%, which has highlighted that investors are facing an uncertain environment. Get rid of technology growth stocks that have risen in the past.
JPMorgan Chase reminded investors in a report issued on Monday (21st) that growth stocks, mainly technology-based, are still not cheap at this time despite their heavy losses in the past six months.
According to statistics, in recent yearsUS stocksThe most popular FAANG technology stocks have not performed well recently. Facebook has fallen 38% this year, and Netflix has fallen about 35%, far worse than the Nasdaq, while Amazon and Google have fallen 8.5% and 10%, respectively. Also worse than the Dow, only Apple fell 5.7% relatively resistant.
The report of JPMorgan Chase found that since the peak in September last year, the stock price of U.S. technology stocks has fallen by about 30% on average, and the financial technology companies (fintech) that investors have sought after have fallen by 40%. The performance of technology stocks in the past six months can be said to be a disaster. heavy.
However, compared with the poor performance of technology growth stocks, stocks that have long been in the value field, such as banking stocks and raw materials stocks, have performed well. Among them, the Dow Financial Index has benefited from the potential interest rate hike by the Federal Reserve and has risen 12% this year. %, while the Dow Jones U.S. oil and gas index also rose 19.8%, benefiting from high oil prices.
The phenomenon of value stocks beating growth stocks is not only seen in the United States. From the beginning of 2022 to February 15, the MSCI Global Value Index fell only 0.6%, but the MSCI Global Growth Index fell 10.1%. It is a global trend to show that growth stocks have significantly lagged value stocks so far in 2022.
The recent reason for investors to abandon technology growth stocks in 2022 is that the U.S. will raise interest rates after March to fight inflation. In 2022, interest rates may be raised at least 4 yards, and the U.S. 10-year bond yield once rushed to 2 from 1.51% at the end of last year. % above, the latest quotation is still at the level of 1.927%.
The higher the U.S. bond yield, the relatively low average dividend yield of the Nasdaq constituent stocks of 0.74%, which triggered investors to sell technology stocks sharply. , has also left the Dow underperforming so far in 2022.
The main effect of the decline in U.S. stocks so far in 2022 is the revision of stock price valuations. The forward price-earnings ratio of the Dow has dropped to 18.3 times, the S&P 500 has dropped to 19.7 times, and the price-earnings ratio of the Nasdaq 100 constituents has dropped to 18.3 times. 24.8 times.
For the S&P 500 index, the long-term average price-earnings ratio is about 15 to 16 times. With the recent correction of the stock price decline, its forward-looking price-earnings ratio has gradually approached the long-term average, which means that as long as the company obtains Profits continue to grow, and the long-term investment value of the S&P will gradually emerge over time.
For technology stocks, since September last year, investors have begun to expect that the Federal Reserve will launch a tightening policy to fight inflation in the future, and the correction of the overall stock price has been large. If corporate profits do not plummet due to interest rate hikes, with technology stocks Valuation revisions will also attract investors’ long-term attention. As long as the U.S. inflation temperature shows signs of falling significantly, investors will expect the Fed to tighten or slow down, and the performance of technology stocks may ease.
On the other hand, the performance of value stocks in 2022 will form a seesaw with technology stocks. Although at this time, it is affected by the transfer effect of technology stocks’ hedging, once technology stocks stop falling and rebound, the funds of value stocks will flow back to technology stocks.
Taking the international oil price as an example, it is currently rising due to the unresolved crisis in Ukraine. The latest price of West Texas crude oil is about 93 US dollars / barrel, and many investment banks are looking at more than 100 US dollars. However, once the Ukrainian crisis ends peacefully or is quickly resolved in a war situation, oil prices may lose the hype and return to fundamentals, causing the stock prices of related raw materials stocks to fall back.
Financial stocks have performed strongly so far, but U.S. bond yields may have a ceiling effect this year, and may rise as high as 2.3% to 2.5%, when the incentives for financial stocks to hedge against risk will sharply diminish. In addition, the poor performance of U.S. stocks so far in 2022 is not conducive to the investment income of financial stocks, which will be gradually revealed in future financial reports. For a long time, financial stocks have belonged to the field of value investment. It is difficult for long-term valuations to be raised as much as technology stocks.
On the other hand, technology stocks have generally performed poorly this year. However, according to FactSet statistics, the investment value of many well-known technology companies has emerged. For example, Micron Technology has a forward price-to-earnings ratio of 8.95 times and a dividend yield of 6.17%; financial data company Fiserv P/E ratio of 14.87 times, dividend yield of 6.78%; Fidelity National Information Services Inc. yield rate of 6.78%, P/E ratio of 15.12 times.
In addition, electronic transaction service companies Global Payments, Broadcom, Corning, Google, communication services company Teledyne Technologies, third-party payment platform PayPal and other well-known technology companies are also below 23 times their earnings, but their dividend yields are above 4.7%. It belongs to the field suitable for long-term investment.
In other words, the stock market has reflected changes in the general environment since 2022, making investors generally favor value stocks and abandon technology growth stocks. However, from the perspective of investment in various stocks, more and more technology growth stocks have fallen as their share prices have fallen. When value emerges, long-term investors should choose stocks rather than markets.
Responsible editor: Ye Ziwei#