No tech bubble means market sell-off won't persist, CIO predicts.

• Manish Singh, chief investment officer at Crossbridge Capital, stated on CNBC that he does not see any reason to be concerned about a bearish pattern in the market where it is overbought and people are likely to sell. He explained that he does not see that specific pattern.
• He stated that although some stocks have excelled in earnings, there is no overall bubble based on the recent performance of major indexes.
• Despite the anticipation of market participants, August is typically a volatile month.

Despite an early-August slump, global markets are gradually recovering, and a tech bubble burst is unlikely to cause a prolonged economic downturn, according to one asset manager.

The recent sell-off has caused technology stocks to experience significant losses, with declines of 1.6% in July and over 4% in August for the Nasdaq 100 index. This has reignited a discussion about whether the tech sector is experiencing a bubble that could eventually burst.

Manish Singh, chief investment officer at Crossbridge Capital, stated on CNBC's "Squawk Box Europe" on Monday that he does not see a tech bubble, as some stocks have performed well and have done so based on earnings they have delivered.

Singh pointed out that on an equally-weighted basis, the Nasdaq has remained flat over the past three years.

If seven out of your 100 stocks are performing well due to earnings, that's acceptable. However, since 90 of your stocks are underperforming, there's no reason to worry about entering a bearish pattern where the market is overbought and people will sell. I don't see that pattern occurring.

The "Magnificent Seven" of , , , , , and have contributed to the recent bull run in the tech sector.

Singh stated that the broader market did not appear overbought, as it had only gained less than 4% per annum over the past three years due to weakness in 2022 and 2023.

The sharp sell-off in Microsoft's stock was driven by its earnings results, but the subsequent rally was triggered by the semiconductor firm's results, which reinforced the strong demand, Singh continued.

He stated that the market's conviction, regardless of its direction, is not conveyed by that information.

Volatility to remain

Despite recent gains in European, Asian-Pacific, and U.S. stock markets, market-watchers predict that volatility will persist.

Singh stated that August may have more volatility due to seasonal patterns, as seen in the similarity of last year's graph to the current year's.

"The market's behavior during the U.S. election season is similar to what you see in a typical year, with a peak in August and September, followed by a post-election rally," he stated.

Goldman Sachs Private Wealth Management's managing director in the investment strategy group, Matheus Dibo, pointed out that last Monday's Vix volatility index spike to an intraday high not seen since the 2008 Financial Crisis or the pandemic. However, he emphasized that the current backdrop was vastly different from those events.

On Monday, he told CNBC that the Vix was pushed higher due to technical factors, which were exacerbated by macro concerns and the unwinding of the yen carry trade. This led to a synchronized decline in equities, bond yields, and commodities.

The release of U.S. retail sales data, the consumer price index, and the Federal Reserve's conference at Jackson Hole could keep volatility elevated for a while, as they have the potential to move markets this month.

In our view, the fundamental underpinnings of the U.S. economy remain solid, despite other factors.