In an interview with Bloomberg, Mueller-Glissman cautioned against extrapolating results from the highly cyclical tech hardware and semiconductor industries.
- A potential reopening of the Strait of Hormuz could help broaden the rally beyond AI-focused momentum stocks toward Europe and bond proxies, he said.
- Mueller-Glissman noted that it's been a remarkable rally, pushing the momentum stocks higher.
- He added that the biggest danger for stocks currently would be if investors start to doubt the stellar earnings growth that has driven most of the market gains so far this year.
Christian Mueller-Glissman, head of asset allocation research at Goldman Sachs, reportedly said on Friday that the pullback in tech stocks may be exactly what the sector needs after a run that pushed it to speculative positioning.
"It's been a remarkable rally; it's been pushing these momentum stocks up a lot," said Mueller-Glissman during an interview with Bloomberg TV, pointing to the surge in leveraged ETFs and options positioning that has accompanied the tech surge. "It's probably not a bad idea to see a bit of consolidation," he added.
Mueller-Glissman cautioned against extrapolating results from the highly cyclical tech hardware and semiconductor industries. He also added that the biggest danger for stocks currently would be if investors start to doubt the stellar earnings growth that has driven most of the market gains so far this year.
S&P 500 companies posted their strongest earnings growth in five years in the first quarter, driven by Big Tech, the report added.
AI-linked companies are seen as a major reason the U.S. index could exceed 20% earnings growth in 2026, Bloomberg Intelligence said last month, according to the report.
Hormuz Reopening Could Broaden The Rally
Beyond the tech consolidation, Mueller-Glissman sees the reopening of the Strait of Hormuz as a potential catalyst that could broaden the rally toward Europe and bond proxies, away from the AI-heavy momentum trade.
The Strait of Hormuz, a major trade route for global oil shipping, has been under threat amid tensions in the Middle East this year.
At the time of writing, Intel and AMD shares were down nearly 6%, Nvidia (NVDA) lost nearly 4%, and Broadcom (AVGO) stock slid over 4%.
What Retail Thinks Of QQQ, SOXX
At the time of writing, the retail sentiment around Invesco QQQ Trust Series 1 (QQQ) has remained ‘bullish’ amid ‘normal’ message volumes in the past 24 hours. At the time of writing, QQQ was down over 2%. It has gained over 17% so far this year.
Meanwhile, iShares Semiconductor ETF (SOXX) was down over 5% on Friday.
On Stocktwits, the retail sentiment for SOXX has remained ‘extremely bearish’ while message volumes stayed in the ‘high’ region over the past 24 hours.
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