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'There is an excuse out there looking to sell some tech:' strategist

With large cap technology stocks outperforming during the pandemic, one strategist warns “tech has been looking for an excuse to sell off.”

“This doesn’t mean large cap tech has to unleash a selling wave, but I think there is an excuse out there looking to sell some tech,” Paul Schatz, president and chief investment officer at Heritage Capital told Yahoo Finance’s The First Trade.

“It’s not so bad ... if they go sideways, that would be healthy for a while” said Schatz, adding they’ve “got to catch up with the fundamentals.”

His comments come on the day when the CEOs of Amazon (AMZN), Apple (AAPL), Alphabet (GOOGL), and Facebook (FB) testify before congress in anti-trust hearings.

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“Congress is not going to be pleasant to large cap tech. They’re going to jawbone. It’s an election year, they’re going to want people to know they’re fighting for the little guy,” he added.

‘I don’t think we see unemployment at the levels we saw in January, in my lifetime’

On Wednesday General Motors (GM) swing to a loss for its second quarter, though the loss was not as bad as what wall street was expecting. Shares of GM opened the session higher this morning and then dipped into the red.

“The auto stocks trade like most of the other super sensitive cyclical stocks,” said Schatz.

“They’ve got a headwind in that we don’t know what’s going to happen with a congressional package,” he said. “I don’t think the economy will fully recover ... I think you’ve got years to come, and I don’t think we see unemployment at the levels we saw in January, in my lifetime.”

‘My how the mighty have fallen’

Former Dow (^DJI) component General Electric (GE) reported a loss worse than what analysts were expecting. However its loss in industrial free cash flow of $2.1 billion came in narrower than its own previous guidance. The company has been struggling for years. It was in the midst of a turnaround plan when the pandemic hit.

“Twenty years ago, GE was the stock. It was the Apple of that era. And now it’s $6 and change. My how the mighty have fallen,” said Schatz.

“If they’re going to survive, which i think they will, they’re probably in this long-term bottoming period, where it’s going to take several management changes,” he added.

“Maybe it’s a 2022 story, but for my. money, it’s not a 2020 story, or even a first have of 2021 story. No thank you,” said Schatz.

Ines covers the U.S. stock market. Follow her on Twitter at @ines_ferre

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