The major indexes (^DJI,^GSPC, ^IXIC) are bouncing back after a three-day sell-off triggered by a weaker-than-expected jobs report in July. As investors continue to be wary of a recession, Apollo Global Management chief economist Torsten Slok joins Catalysts to discuss the market reaction and break down why tech, in particular, is seeing a massive sell-off.

Slok notes that despite the weak labor report, there's not much other evidence that points to a recession: "Daily data for how many people fly on airplanes as of last Friday is still strong. Daily data from OpenTable for how many people go to restaurants is still strong. Weekly data for retail sales from Redbook is also still strong. Hotel occupancy rates, the weekly data also still strong."

He reiterates Federal Reserve Chair Jerome Powell's emphasis on the totality of the data, and adds, "the market is overreacting to just one data point."

He believes that the tech sell-off is being driven by two factors. The first is because "valuations got so stretched and earnings expectations were simply inconsistent with where valuations were." Therefore, when some of the Magnificent Seven tech names missed expectations, investors reassessed their positions.

The second boils down to the carry trade unwinding: "You've seen a reversal of a lot of trades where essentially investors were borrowing in yen. Remember, in yen, interest rates up until literally two weeks ago were zero. Now they went up to 25 basis points... dollar-yen has moved from 161 down to 144. That means that if I borrowed in yen, now I need to pay back in yen. If yen is more expensive, that means that I need to pay back more."

Note: Apollo Global Management is Yahoo's parent company.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Melanie Riehl