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Jim Paulsen: Here's what's really behind the tech stock drop

Jim Paulsen, Independent Investment Strategist
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Key Points
  • The S&P 500 Information Technology Sector Stock Price Index has declined by almost 5 percent since its peak on June 8th.
  • Currently, there is little evidence U.S. economic momentum is improving.
  • Most perceive the recent pullback in technology stocks as a valuation adjustment.
Jim Paulsen
Adam Jeffery | CNBC

The S&P 500 Information Technology Sector Stock Price Index has declined by almost 5 percent since its peak on June 8th. Many believe this represents an overdue valuation adjustment after the index soared by about 40 percent in the last year. Certainly, a refreshing pause after such an aggressive run makes sense. However, rather than necessarily signaling an overvalued sector, we believe the recent pullback in tech stocks may be a reaction to a forthcoming reacceleration in U.S. economic momentum.

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