Time to buy those Blue Chip Tech stocks at big discounts and hold onto them? – June 24, 2022

Today’s episode of Full Court Finance at Zacks dives into the state of the market and economy amid pessimistic consumer sentiment and growing recession fears. The strong selloff that sent the S&P 500 into a bear market could return after a nice bounce. Nonetheless, investors with a long-term outlook might consider buying blue chip tech stocks at very attractive prices. The two stocks we’re exploring today are Microsoft (MSFT Free report) and Adobe (ADBE free report).

Stocks made a bit of a comeback this week after a tough time that saw the S&P 500 fall into a bear market and post its worst performance since the initial covid crash in March 2020. The positivity could mean some on Wall Street are starting to think the Fed’s rate hike efforts are now almost fully priced in.

Others might bet that the economy will slow enough that the central bank doesn’t have to raise rates much further. Another very real possibility is that this is just another bounce in a longer term pullback.

Calling a bottom in real time is extremely difficult and no one knows what the economy will look like by the end of the summer. Determining what happens next is made more difficult amid seemingly conflicting data that shows ultra-low unemployment, millions of job creations and strong consumer spending overall, contrasting with ultra-weak consumer sentiment, soaring inflation and a slowdown in GDP projections.

The Fed’s goal is to engineer a so-called soft landing for the economy, which will be difficult. But there are already signs of cooling in the housing market, tech jobs, retail spending, and more. And valuations continue to be squeezed in the face of rising interest rates. The Q2 earnings season and June CPI print (expected July 13) could prove extremely crucial in the near term.

The unknowns are obvious and there is clearly more downside potential. Fortunately, investors with long-term horizons don’t have to worry about exact market timing and might want to use the current uncertainty and pessimistic consumer attitudes as a chance to start positions in big stocks ahead of time. solid discounts.

The first top-notch tech stock we explore is Microsoft (MSFT Free report) . The tech titan has fallen from its November highs and it cut its sales and earnings forecast in early June due to currency headwinds. But Microsoft has recalibrated its long-term trajectory with its expansion into the booming cloud computing industry and its outlook remains truly impressive after a long period of double-digit growth.

Next up is creative and design software powerhouse Adobe (ADBE Free report) . Adobe stock is down more than 40% from its highs and surpassed our June 16 quarterly estimates. Wall Street, however, is concerned about its short-term outlook after providing slightly lower guidance due to a strong US dollar and other short-term outlook. reverse. from Adobe fall could provide a great entry point into fantastic stock.

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