Hedge funds are rapidly pulling back from global information technology stocks, particularly in semiconductors. The recent sell-off is the fastest in six months, bringing their IT exposure down to 16.4%, the lowest in over five years. Factors driving the sales include rich stock valuations, lowered earnings expectations, geopolitical risks, and a technical signal known as a death cross, indicating a bearish trend. Some strategists suggest further declines could occur, around 10% to 15% more, signaling potential challenges in the market.
"Hedge funds are swiftly cutting back on their global IT stock exposure, with the semiconductor sector bearing the brunt of recent sales, now down to 16.4% of portfolios."
"This marked sell-off is attributed to high stock valuations, rising geopolitical tensions, and an impending technical signal known as the death cross on major indices."
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