While I openly admit I am not a financial wizard or stock market expert, I do have eyes and what I have been seeing watching what Wall Street has dubbed FAANG, which are the "five most popular and best-performing tech stocks," indicates that something huge happened last week and is still ongoing.
WHAT IS FAANG?
Investopedia describes FAANG as "FAANG is an acronym for the market's five most popular and best-performing tech stocks, namely Facebook, Apple, Amazon, Netflix and Alphabet’s Google. FAANG was born out of the original acronym, FANG, which did not have Apple included when CNBC’s Jim Cramer coined the term.."
According to that same page "FAANGs have been likened to that of the tech stocks before the 2000 dotcom burst, which saw a lot of overvalued tech companies crash, sending the global markets to a downward spiral."
ALL FAANG STOCKS PLUNGED AFTER FACEBOOK'S HISTORIC CRASH
On July 26, 2018, Facebook suffered the biggest stock market loss in history, not just for the company itself, but of all time, when they lost approximately $119 billion in one day. By July 30, 2018, they have recovered none of those losses and are down further than they ended on Thursday.
The crash came after the closing of the markets on Wednesday when Facebook's CFO, David Wehner, admitted that shareholders could expect "revenue growth rates to decline by high single-digit percentages from prior quarters" for the third and fourth quarters," according to Jim Cramer, who initially coined the term FAANG.
That explanation makes sense, but seems to have had a domino-type effect on the other members of FAANG, which show that each and every one of the FAANG's started dropping on the 27th, all of them.
The visuals speak loudly and could be indicative of the start of the FAANG bubble bursting.
As shown above, each of the FAANG stocks were at their highs between the 26th and 27th, and each of them started going down, with a bump here and there, but are all lower on the July 30th (at the time this article is being written), than they were between the 26th and 27th.
One last graph below, which is not part of the FAANG group, but is a tech/social media company, Twitter, which saw a huge drop on the 27th.
Granted, three days does not a pattern make, and some of those losses are far less severe than those of Facebook, Amazon, and even Twitter even though it isn't part of the FAANG group, but does indicate that more is going on than meets the eye.
Exit Question: Are we watching the beginning of the end of tech dominance in the stock market? Second question: Would a FAANG crash tank the stock market itself?
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