According to Bloomberg News, when purchasing stocks that appear to be in the middle of a skydive, it is often referred to as “catching a falling knife” because of the obvious danger that is involved. Technical analysts Oppenheimer & Co. have reported that technology stocks, which were last week’s worst-performing industry is now an attractive opportunity, placing themselves underneath the knife.
To understand the speed of how fast that knife is moving, according to Bloomberg News, Standard & Poor’s 500 Index sank 2.2 percent on April 4, the worst drop in almost a year. It has also been reported that the Russell 2000 Index, which is made up of companies with an average market value of about $1 billion, is down more than 5 percent from its last record listed on March 4.
Headquartered in New York City, Oppenheimer & Co. Inc. is a principal subsidiary of Oppenheimer Holdings Inc. (OPY on the New York Stock Exchange), and its affiliates, according to Market Watch, provide a full range of wealth management, securities brokerage and investment banking services to high-net-worth individuals, families, corporate executives, local governments, businesses and also to institutions.
Deutsche Bank AG reports that “equity beta positioning has moved towards neutral.” When a stock has a higher beta this means it tends to also rise faster than benchmark indexes during rallying markets, and fall more during down markets. Stocks with higher beta are the “knife” that might be attractive to try to catch at some point, according to Bloomberg Business Week. Many funds that borrow money to buy stocks were forced to cut their bets on higher beta, according to a Deutsche Bank report that was dated April 4.
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