Monday's market action was a 'tantrum' amid a growing sell-off
Markets were under pressure in Monday's session, as the Dow Jones Industrial Average (^DJI) sank by 1,033 points, the Nasdaq Composite (^IXIC) dropped by 576 points, and the S&P 500 (^GSPC) fell by 160 points. iCapital Chief Investment Strategist Anastasia Amoroso joins Market Domination Overtime to break down the movement and how investors could navigate this volatility. Amoroso explains that the sell-off has been gaining steam, and today's action "feels like a tantrum." She notes that the movement came down to "the systematic unwind of a lot of long positioning," as hedge funds were long technology, for one. She adds, "whenever you see this downward knee-jerk reaction, the first place you look at is technicals. And so I think that's what's at play today. But I do think there's something else that's in the background, and that is, of course, I call it 'market mood' to price in a recession." She explains that markets were spooked by July's jobs report and the idea that the Federal Reserve is behind the curve when it comes to interest rate cuts, which ultimately stoked fears of a recession. Amid a slower economy, Amoroso expects defensive trades to outperform and points to tax-exempt municipal bonds as a good opportunity. She also believes real estate is a solid play, as it is a sector best positioned to benefit from an interest rate cut. While the technology sector is being hammered by a global sell-off, Amoroso argues that in the longer-term, investors could buy some of the semiconductor stocks that benefit from AI on the dip. For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime. This post was written by Melanie Riehl
