Tech stocks no longer dominant in US stock market
FAANG stocks are not carrying the US stock market in 2019.
Apple and Amazon are no longer driving Wall Street. Tech stocks have declined over the last few months and it could have a lasting effect on the US stock market.
Why are tech stocks declining?
FAANG(Facebook,Apple, Amazon,Netflix and Google) stocks were once the most vital stocks on Wall Street for the past 10 years. However, with the latest global slowdown, many of those corporations are having trouble maintaining its growth and had a major selloff in 2018.
‘This is the first quarter in my memory that technology has on the whole had worse metrics than the S&P 500,’ said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.
Apple's revenue and Amazon's earnings exceeded expectations in their latest results. However, both companies still projected weak guidance for future revenue because of declining sales overseas, especially in China.
Netflix's revenue report also caused shares to fall after its latest earnings were worse-than-expected after going into debt to provide content to consumers. Though Facebook's latest revenue report had better-than-expected earnings, the company’s reputation has been tarnished with many investors because of its data privacy issues.
What’s next for FAANG?
Though the FAANG stocks have declined, their earnings still generated billions of dollars in revenue and can rise if the US-China trade issues are resolved. Daniel Ives, Wedbush Securities analyst, is optimistic that the tech shares could rise and lift up the US stock market.
‘There was real concern that tech was the canary in the coal mine of what would be a very dark 2019. Thus far a lot of those fears are proving overblown’, said Ives.
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