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Brendan McDermid | Reuters
Trader Peter Tuchman works on the floor of the New York Stock Exchange, (NYSE) as the Dow Jones Industrial Average crosses 24,000, in New York, U.S., November 30, 2017.
“The tech sector has been valued under this expectation that, again, trees are going to grow to the sky, and we’re going to sell more and more and more of everything in an unlimited fashion,” he said. “And so, all of a sudden, people are beginning to recognize that maybe valuations got ahead of where they probably should have been and they must reset.”
The International Monetary Fund forecast in October that the U.S. economy would grow 2.5 percent in 2019. Youngkin said The Carlyle Group was slightly more optimistic, predicting GDP growth of between 2.5 percent and 3 percent. He said that would bode well for sectors, like tech, that “find their demand principally driven by confidence in the consumer.”
He questioned the idea that lower growth will lead to lower earnings, saying that “the concept of slowing growth does not mean declining earnings … Headlines are always that things are declining, but they’re not,” he said. “Growth is slowing.”
Youngkin added that a moderation of the growth rate was normal.
“Over the course of the last 12-18 months, most people have felt like the economy was going to grow to the sky and all of a sudden we have this very natural slowing of growth – not stalling – and the markets are appropriately resetting.”
– CNBC’s
Fred Imbert
contributed reporting to this story.
