Jonathan D. Corpina, Meridian Equity Partners Inc. Senior Managing Partner, joins Yahoo Finance’s The First Trade with Alexis Christoforous and Brian Sozzi to discuss what’s driving the tech sell-off and the markets' reaction.
Video Transcript
BRIAN SOZZI: The tech sell-off continues, and the market is getting a little bit nervous. Let's bring in Jonathan Corpina, Senior managing partner at Meridian Equity Partners. He's down at the floor of the New York Stock Exchange. Jonathan, how long does this tech sell-off have to go?
JONATHAN CORPINA: Hey, Brian. Good morning. How are you? Listen, we've seen this tech run up for quite some time, right? We saw the market have the sell-off, we hit the lows in March, and then we shot straight higher from there. And during that whole time, technology was the leader that got us back to the levels that we're at now. So maybe we went a little bit too far and too fast.
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To see this pullback here from a trader's perspective, it's certainly healthy. We cannot have one way markets either if it's going straight up or straight down. At some point, the market kind of finds its range, and I think that's where we are right now. We traded straight up on a level, got to 3,500 in the S&P, pulling back now. Good to see things are quieting down a little bit.
Yes, there was a little apprehension coming into today. We've rebounded, you know, ever so slightly off the lows of this morning, but I think we're going to see this volatility back and forth, and once again, have to keep things in perspective. Look at some of these tech names that have led this rally, the tremendous games that they have had so far this year. And now, having a little profit taking is something that we're going to see probably across the board, but not on a real significant level.
I think the swings that we're seeing probably are a little bit magnified with some lack of volume and a little bit of extra volatility that's in our markets at this point. But the uncertainty moving forward is clearly still there. We still have US-China relations that was a major headline coming into this year. That's been pushed aside, but that continues to move our markets or add some apprehension to our markets. And we're less than-- we're eight weeks away from an election as of today, which is really going to be our market catalyst, our market indicator as to what investors are really feeling as we get closer and closer to that November date.
ALEXIS CHRISTOFOROUS: And Jonathan, can you tell us if this sell-off we've been seeing over the past few days has been orderly, or has there been a sense of panic selling? And also, you touched on volume, is volume pretty healthy? I know we're just coming off of a long holiday weekend, so I'm wondering how much should we really believe the sell-off?
JONATHAN CORPINA: Yeah, great point. Last week, volume participation was quite low, so the movements that we saw on the market should have happened. They should have occurred. But probably they were magnified, because no one was standing up and buying at certain points when they when they normally would have.
Yes, last week was a week leading into the holiday week. This is a shortened week, session week, that we're here, so we're still seeing some of that, you know, three day weekend hangover of not a lot of participation. So once again, that adds a lot of volatility to our markets.
And then as far as, you know, the markets are concerned, it's funny. I had a conversation with a client last week, and I said, you know, why are we getting hit, you know, why are we down so much today? And his reply was, why have we been up? And I think that's kind of what we're seeing. The market went up, and I don't think everyone was really, you know, quote unquote, "buying into it," really had that conviction that we should be trading at the levels that we saw.
We saw in some areas some individual stock splits that occurred that added maybe a little bit of euphoria leading up to it. So we're getting back to a little bit of a normal range in our markets. I would just like to see us have more volume, and I'd like to see us build a base at this point. The market's going to continue to go up and down, but if we get these, you know, 2% plus swings either way, I think that will be healthy.
ALEXIS CHRISTOFOROUS: But is there a sense that there's panic selling going on here, Jonathan, or has it been pretty orderly?
JONATHAN CORPINA: Right, sorry, I should've followed up before. No, not at all. It's been very orderly.
ALEXIS CHRISTOFOROUS: It was a big question. That's OK.
JONATHAN CORPINA: Yeah. No, it's been very orderly. There's been no panic selling. I think everyone has kind of ridden this wave in a nice pattern. So when you get this pullback, there is no, oh my god. The bottom is falling out of the markets, you know? The returns that investors and traders have had throughout this year and throughout time are pretty significant.
So when you see this move like that that we have been seeing, I think, you know, from the clients that we've been talking to, it's more of, OK, this is happening. This is supposed to happen. We knew it was going to happen, it's just a question of when. Let this flush out kind of get through this time period that we are right now, because we clearly have some significant items on our calendar moving forward.
But there has been no panic, there's been no fear that we're going to be heading back to what we saw in the end of the first quarter of this year. I think that's kind of behind us as far as that deep market, you know, pain and fear sentiment. And I think right now it's been much, much more orderly.
BRIAN SOZZI: All right, Jonathan Corpina, Senior Managing Partner at Meridian Equity Partners, always good to see you.
JONATHAN CORPINA: Thank you, appreciate your guys time.
