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Farewell, FAANGs: Big tech stocks sink and Dow falls 400 points

Farewell, FAANGs: Big tech stocks sink and Dow falls 400 points
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The broader market fell sharply on Monday: The Dow was down 400 points, or 1.1%, in early afternoon trading, while the S&P 500 and Nasdaq were down 1.4% and 1.8%, respectively.

Growth stocks have fallen in particular this year so far due to concerns about slowing inflation in the economy.

The so-called FAANG stock – the owner of Facebook ID pads (FB)And An apple (AAPL)And Amazon (AMZN)And Netflix (NFLX) And the owner of Google the alphabet (Google) – They all fell sharply in 2022. And so did Microsoft (MSFT)Chip Giant nvidia (NVDA) and Elon Musk Tesla (TSLA).
the SPDR S&P 500 Growth . Portfolio (to spy) The ETF has already fallen by more than 6% in 2022 while it is down iShares Russell 2000 Growth (IWO) The ETF, which holds shares in smaller-growth stocks, is down 7.5% since the start of the year.

“If the first week of the year is any indication of what to expect over the coming months, investors will have to be smart in 2022, and be aware of any significant exposure they may have to grow stocks,” said Solita Marcelli, Chief Investment Officer. Americas Officer at UBS Global Wealth Management, in a report on Monday.

It is worth noting that two major sectors of value, namely financial stocks and oil companies, are booming.

the Invesco Bank KBW (KBWB) The ETF was flat on Monday and is up 10% this year. Banks benefit from higher interest rates because they make lending more profitable.
Investors will be excited to know about the mega banks c. B. Morgan Chase (JPM)And City Group (c) And Wells Fargo (WFC) Tell about the higher bond yields when they report Friday’s earnings.
and the SPDR power strip selection (XLE) ETF that owns ExxonMobil (XOM)And chevron (CVX)And ConocoPhillips (policeman) And other oil giants are up 9% this year as crude oil prices have risen from about $72 a barrel to $78 last month.
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So not all sectors will be affected by inflation, and it looks like savvy investors are starting to make changes to their portfolios as the big winners in the bull run over the past few years are finally losing their luster.

UBS’s Marcelli noted that “valuations of developing companies should compress more quickly for value stocks” while the Federal Reserve raises interest rates.

“That’s exactly what happened in the first week of the year,” she said, adding that “the most speculative, very fast-growing, non-profit tech companies have slipped more” than the big tech companies on Nasdaq.

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