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Abstract

s this year. But recently, not so much.Tesla has been dominating the recent news, rightfully so, as it is up about 50% in the past month and even more for the year. The approval of a COVID-19 vaccine and talks of a new stimulus deal has also been ruling the news.<h2 id="3ac9">Performance This Past Month</h2>All that said, FAANG and Microsoft have not had any gains this last month. Well, four of the six haven’t really had any.Using the market close price of 12/15 and the market opening price of 11/16, here is how the six stocks have performed:FB — 0.18%AMZN — 2.33%APPL — 7.53%NFLX — 8.29%GOOGL — (0.17%)MSFT — (0.34%)Looking at the charts of these companies for the last month provides a better picture. You can see four of the six haven’t really done anything.Apple was up big 12/15 on news, but before 12/15 their monthly gain was less than 3%. And Netflix is likely benefiting from the rising cases and stay at home orders being issues.<h2 id="894d">What it Means</h2>In a world dominated by technology, it's not often the big tech stocks l

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ag the market. If a stimulus bill passes, the market could be poised for a breakout. And this breakout could be led by FAANG and Microsoft.While recovery stocks like major airlines (UAL, AAL, etc.) and oil companies (XOM, BP, etc.) are up the past month, they may not have more room to run. As the virus is contained and the world goes back to normal, recovery stocks will…well recover. But a stimulus bill now would help the biggest companies. People will push money into the market and FAANG and Microsoft will benefit, similar to how they did after the first stimulus bill.There’s no guarantee that a new stimulus bill will pass. And there’s no guarantee that if one does pass, the market or any of the above-mentioned stocks will take off. But after moving sideways for the past month, an additional $800 billion ejected into the economy could give these stocks that boost they need.The opinions expressed in this blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry.</article></body>

FAANG Stocks Haven’t Moved In A Month — What That Means

Facebook, Amazon, Apple, Netflix, and Google. Also known as FAANG.

Four of the top five (sorry Netflix) largest companies in terms of market capitalization. The other company in the top five, Microsoft (they will be important to look at too.)

Being such large companies, they have a great influence on the market. Apple, Microsoft, and Amazon account for more than 16% of the S&P 500 weighting. In an index of 500 stocks, three stocks have more weighting than over 100 other stocks combined. Almost every, if not every, fund manager has some or all of these companies in their portfolio.

Because of their influence, when they move, the market moves. These six stocks helped lead the market comeback in late March and early April. They have all been great performers this year. But recently, not so much.

Tesla has been dominating the recent news, rightfully so, as it is up about 50% in the past month and even more for the year. The approval of a COVID-19 vaccine and talks of a new stimulus deal has also been ruling the news.

Performance This Past Month

All that said, FAANG and Microsoft have not had any gains this last month. Well, four of the six haven’t really had any.

Using the market close price of 12/15 and the market opening price of 11/16, here is how the six stocks have performed:

FB — 0.18%

AMZN — 2.33%

APPL — 7.53%

NFLX — 8.29%

GOOGL — (0.17%)

MSFT — (0.34%)

Looking at the charts of these companies for the last month provides a better picture. You can see four of the six haven’t really done anything.

Apple was up big 12/15 on news, but before 12/15 their monthly gain was less than 3%. And Netflix is likely benefiting from the rising cases and stay at home orders being issues.

What it Means

In a world dominated by technology, it's not often the big tech stocks lag the market. If a stimulus bill passes, the market could be poised for a breakout. And this breakout could be led by FAANG and Microsoft.

While recovery stocks like major airlines (UAL, AAL, etc.) and oil companies (XOM, BP, etc.) are up the past month, they may not have more room to run. As the virus is contained and the world goes back to normal, recovery stocks will…well recover. But a stimulus bill now would help the biggest companies. People will push money into the market and FAANG and Microsoft will benefit, similar to how they did after the first stimulus bill.

There’s no guarantee that a new stimulus bill will pass. And there’s no guarantee that if one does pass, the market or any of the above-mentioned stocks will take off. But after moving sideways for the past month, an additional $800 billion ejected into the economy could give these stocks that boost they need.

The opinions expressed in this blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry.