• “I don’t see any reason to worry that we’re getting into a bearish pattern where the market is overbought and that’s why people are going to sell. I just don’t see that pattern,” Manish Singh, chief investment officer at Crossbridge Capital, told CNBC.
• The development of the major indices in recent years shows that some stocks have achieved good returns, but that there is no general bubble, he said.
• Nevertheless, market participants expect further fluctuations in August, which is traditionally a turbulent month.

Global markets are cautiously recovering from their early August slump – and one asset manager says there is no reason to fear that the bursting tech bubble could trigger a sustained downturn.

Technology stocks were among those most affected by the recent sell-off, falling 1.6% in July. and the more than 4% decline so far in August in the technology-dominated Wall Street index Nasdaq 100 have reignited the debate about whether the sector is in a bubble that is about to burst.

“I just don’t see a tech bubble. Yes, a few stocks have performed well based on the gains they have delivered,” Manish Singh, chief investment officer at Crossbridge Capital, told CNBC’s “Squawk Box Europe” on Monday.

Looking at the Nasdaq, Singh noted that on an equal-weighted basis – where each stock is given equal weight regardless of its market capitalization – the index has remained unchanged over the past three years.

“So if you have 100 stocks and seven of them are doing well because they’re making profits, that’s fine. There are 90 other stocks that haven’t done well, so I don’t see any reason to worry that you’re going to get into a bearish pattern where the market is overbought and people are going to sell because of that. I just don’t see that pattern,” he said.

The technology sector’s recent bull run was driven in part by the so-called “Magnificent Seven”: Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla.

Singh said the broader S&P 500 also does not appear to be overbought, having gained less than 4% per year over the past three years due to weakness in 2022 and 2023.

On an earnings basis, Microsoft’s results led to a sharp sell-off in the stock before results from semiconductor maker AMD sparked a rally by reiterating that demand was still strong, Singh continued.

“However, that does not mean that the market is convinced of the development, no matter which direction it wants to go,” he said.

Volatility remains

Even as equity markets in Europe, Asia-Pacific and the US recover recent losses, market observers agree that volatility is likely to persist.

“I think there will be a little more volatility in August because that is the seasonal pattern. We had something very similar last year. If you put the graph from this year on last year, we are following almost the same pattern,” Singh said.

“This is no different than what you see in a US election year, where there is seasonality around August and September and then the market starts to recover after the election,” he said.

Matheus Dibo, managing director of the investment strategy group at Goldman Sachs Private Wealth Management, pointed to the rise in the Vix volatility index last Monday to an intraday high not seen since the 2008 financial crisis or the pandemic, but he said the backdrop was very different back then.

Technical factors pushed the Vix higher, exacerbated by macroeconomic concerns and the unwinding of the yen carry trade that triggered the synchronized decline in stocks, bond yields and commodities, he told CNBC on Monday.

“It’s hard to say whether the worst is over… volatility could remain elevated for quite some time,” he said, with the release of U.S. retail data, the consumer price index and the Federal Reserve’s Jackson Hole conference potentially moving markets this month.

“But when you look at the fundamentals of the U.S. economy, we think they remain quite solid,” he said.