Matthew Tuttle, CEO & Chief Investment Officer at Tuttle Capital, breaks down the economic factors impacting the technology sector and the future pricing power of Big Tech.

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Tech Stocks Under Pressure, as ARKK Drops to June 2020 Lows

we're gonna bring back Matthew, Total Ceo and chief Investment Officer at Total Capital Management, it's been a while Matthew um just want to kind of get your thoughts here on tech performance and we were talking about that a few moments ago, um but over the last six months, what do you make of text overall performance? So technology and specifically the speculative technology so that you know, the stuff that you see in in Ark Innovation and in some corners of the NASDAQ is doing what you'd expect it to be doing in a rising rate environment that environments Kryptonite for those types of stocks. So you know, there they've got to re price based on an expectation of higher interest rates through in the fact that there are probably way overvalued six months ago. And you have what really amounts to a bear market in those stocks right now, which is exactly what you'd expect given what's going on with the Fed, what's been the recent um or what's been the impact of the recent purchase purchases within the Ark Innovation fund towards, especially towards the credibility of fund managers and their outlook on on just the overall future of tech. Well, so you can certainly question some of the recent purchases that you've seen in in, in our k for example, you know, we've never been a big fan of trying to catch a falling knife and it does always seem like anytime, you know, you get like a document sign or a Zillow that gets crushed, they're in, they're buying it and you know, I think from that standpoint, they're looking at it is, you know, kind of five years out. But if you're a current investor, you know, you you could kind of question some of those purchases, trying to pick a bottom on some of these stocks, which, you know, there's a lot of areas, you know, pick any one of these names that looked like it may be bottoming out and then it ends up taking another leg down. So it's been tough. Yeah, especially if you're an investor that's been used to kind of just, or the growth that arc has enjoyed over the first year and a half or so of the pandemic, um in terms of tech, which industries within tech, do you see kind of the most downward pressure, is it more the speculative tech as opposed to kind of um, you know, the traditional kind of, you know, big market cap cut names? Oh yeah, I mean it's definitely been the speculative tech and that's what you saw for, you know, the last half of last year where, you know, the markets, you know, NASDAQ s and P were making all time high after all time high. But a lot of this stuff beneath the surface was just getting crushed and, you know, now you're starting to see that filter through to the apples, the googles, the Microsoft, but you know, they're not going to have as much downside is the more speculative names, but watch out, you know, if the market eventually really comes for those names and brings them down, there's nothing to prop these indexes up and we, you know, we could be in for quite a selloff in that event. Uh you know, the pricing power of companies like amazon and Apple that's come up recently in earnings report and it's been something that investors at least right now are rewarding these companies for what do you make of their pricing power? And and do you anticipate that being a long lasting, especially amid the picture of kind of this inflationary pressure that every person is dealing with them to your point just before the break really around consumer spending possibly pulling back a little bit amid this higher inflationary environment. Yeah, I mean, these companies are going to be able to maintain their pricing power at the end of the day, you know, their monopolies and everything, but but name only, so I don't, I don't worry about that, I do worry about the economy as a whole. You know, at the end of the day, it's it's consumer driven, you know, consumers have to log on to amazon and have money to buy stuff and consumers have to go to Apple and have money to buy their products and if the consumer is hurting, which, you know, higher inflation in, may be weaker economic growth going forward is going to do that eventually is going to filter into these names and you have been seeing it some so far this year. Yeah, especially in, you know, in amazon for a while now it's starting to look like it's filtering into Apple a little bit. So something you've got to keep an eye on. All right, thank you for sticking around with us and kind of giving us the added insight on Arc, an additional kind of context with tech sector Matthew, Tuttle Ceo and chief investment Officer at Tuttle Capital Management.