FAANG Stocks Impact Broader Markets, Investors’ Sentiments

  • Nov 30, 2018 AEDT
  • Team Kalkine
FAANG Stocks Impact Broader Markets, Investors’ Sentiments

The technology sector in the United States happens to be a sector which decides the broader movement of the equity markets as a decline in these stocks severely impacts the movements in the market as well as the sentiments of the investors. It would not be wrong to say that the big technology giants in the United States like Facebook (NASDAQ: FB), Apple Inc (NASDAQ: AAPL), Amazon Inc (NASDAQ: AMZN), Netflix (NASDAQ: NFLX) and Alphabet Inc (NASDAQ: GOOGL) are the stocks which carry the potential of impacting the markets. Moreover, these stocks are also regarded as the growth stocks by the market players. The stocks in which there is a high probability of the capital appreciation are placed in the list of the growth stocks.

On November 29, 2018, Facebook ended the session at US$138.68 per share while Amazon settled at US$1,673.57 per share. However, Netflix, Google, and Apple ended yesterday’s session at US$288.75 per share, US$1,094.58 per share and US$179.55 per share, respectively.

Needless to say, mainly the stocks which are operating in the technology sector are the stocks which are defined as the growth stocks by the investors. The investors in growth stocks are more interested in the long-term capital appreciation as they make deployments in these stocks on a long-term basis. The deployments in the growth stocks need to be done in those companies which are having strong fundamentals. Therefore, it would not be wrong to say that the investors need to adopt “buy and hold” strategy when they are planning to make investments in the growth stocks. The strong fundamentals of these stocks help them in tackling minor hurdles, and the investors also build up their confidence in these stocks. Another factor which attracts investors towards growth stocks is the company’s strategy re-investment. This re-investment strategy further boosts the confidence of the investors in these companies.

The performance of the FAANG stocks is sensitive to the global macroeconomic variables which could impact the economy as a whole. Therefore, the trade battle between the US and China needs to settle as any escalation could impact the broader technology sector which negatively impact the equity markets. The meeting between the US and China is a key event which the market players might be closely tracking especially the investors in the technology sector. If the outcome of the meeting between these two countries is not positive, the Trump administration might go for slapping more tariffs which might also include some of the products of Apple. It would not be wrong to say that the impacts on the technology stocks would also be felt upon the markets. If the technology companies give an outlook which is not up to the mark as expected by the market players, a strong downtrend in the broader sector would also pull down the performance of the equity markets.


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