Ericsson misses Q1 expectations. Earnings before interest and tax were 2.6bln Swedish crowns ($395mln) compared with 2.1bln in the year-ago quarter. ARM Holdings reported a 9% boost in Q1 profits. Following David Einhorn's talk of a tech bubble, IG's Chief Market Strategist, Brenda Kelly says investors are right to be concerned, and although not all tech companies are overvalued, the sector is the first one to feel market volatility.

SHOWS: LONDON, ENGLAND, UK (REUTERS - ACCESS ALL) (APRIL 23, 2014)

1. IG, CHIEF MARKET STRATEGIST, BRENDA KELLY, SAYING:

JOURNALIST ASKING BRENDA KELLY: 'Which camp are you in? Are you in the momentum stabilizing in China or things are going to get worse? '

BRENDA KELLY: 'I think the fact that we have come in around expectations is a good thing. Certainly, there have been a huge amount of China bears around the place but this does indicate that we could see GDP still north of their 7% mark. Now while I feel that they are expanding their horizons a little bit away from the export market and obviously, the mini-stimulus that we saw recently in terms of building new railroads, improving infrastructure, this was all probably set to kind of impact growth to the negative for the time being. But I think over the longer term, China can probably bounce back and we may be a little bit overly worried there.'

JOURNALIST: 'And interesting, with the yuan at these levels, the export orders look so bad.'

BRENDA KELLY: 'Say that again, sorry?'

JOURNALIST: 'With the yuan at these levels, and the export numbers look like this?'

BRENDA KELLY: 'Well this is obviously going to be a bit of an issue for them. We're seeing yuan at record lows against the U.S. dollar; it's probably the lowest since 1992. But this is something we've come to expect again from the emerging markets over the last number of months, I suppose. There have been a huge amount of currency gyrations in the BRIC countries. And of course, this is the problem we're facing, that the global economy might be pulled back if the emerging markets can't keep up with, I suppose, stagnant growth we're seeing in the developed nations.'

JOURNALIST: 'I mentioned the equity stories at the top, we led with Ericsson. Let me start with something that came out yesterday and this is more talk from David Einhorn, the hedge fund guy of a tech bubble. We've got Apple out today, I think we've got Facebook out today as well. Do you buy this tech bubble talk?'

BRENDA KELLY: 'I think the tech bubble is a real thing but I certainly think there are some technology stocks in there that are very much overvalued, but I think that's the nature of the tech sector. And I think what happened in 1999-2000 is a little bit different than what we're seeing right now. I think what we're seeing right now is that we're coming to the end of a five-year bull market so there is a little bit of confidence denting in the market. You've got the pulling away of quantitative easing. All of this is adding to the volatility in the market and the tech sector is the first one that gets hit. I still think there are stocks in there that do hold value. I think some of the ones that have IPO'd recently probably have been a little bit on the frothy end of things. I think that's what's feeding Einhorn's actual, I suppose, statement there.'

JOURNALIST: 'Sure. And then finally, on the back of all this pharma talk yesterday, M&A comes clearly back into focus. What do you think for the next six months, are we going to see more bolt-on deals generally or are we going to see full-scale big ticket M&A stuff?'

BRENDA KELLY: 'I think we'll see some M&A stuff definitely. I think this is also a symptom of the fact that we're probably coming to the end of this five-year bull run. You do generally see the M&A activity pick up in the latter, I suppose, one-third of that particular era. And I think that's what we're seeing at this moment in time. So maybe not the big-ticket items but certainly, we'll see mergers and acquisitions take hold in the next six months but not necessarily until after May.'