The Nasdaq has moved less than 0.5% so far this week, but many well-known technology names have experienced much greater price fluctuations.
On the one hand, the proverbial FAANG shares, which have generally been trading below Nasdaq since September, have risen higher.
Facebook (FB) – Get report and Netflix (NFLX) – Get report is each about 4% higher than the Apple close, last Thursday (AAPL) – Get report is about 3.5% higher and Amazon.com (AMZN) – Get report is about 4.5% higher. Alphabet (GOOG) – Get report and Microsoft (MSFT) – Get report is each slightly higher than 1%.
Amazon could potentially get a boost from a press release on Monday trumpeting holiday season sales. Among other things, Amazon announced that its sales during the holiday period with marketplace sellers increased by more than 50% annually.
Apple, which reached a new high this week, appears to be still getting a boost from last week’s Reuters report that it’s working on an electric car. Continued signs of a strong iPhone demand can also help.
But while the tech giants are having a great week, the same cannot be said for many Robinhood favorites such as the internet, cloud software, and electric car games.
Zoom video communication (ZM) – Get report, which sold out last week after a report on plans to launch email and calendar programs expressed concern about competitive pressure, is down another 6% this week. Similarly, the online TV service provider FuboTV (FUBO) – Get report fell 16% this week after hitting last Thursday thanks to a very clumsy LightShed Partners report.
C3Ai (KI) – Get report, which was offered to a nosebleed despite the fact that COVID sales pressure is high this year, is also down 16%. snowflake (SNOW) – Get report is 6% lower, Palantir Technologies (PLTR) – Get report is 11% lower and (thanks to big Tuesday sales) electric car battery developer QuantumScape (QS) – Get report is 14% lower.
What is causing this technological rotation? Year-end transactions done for tax and portfolio rebalancing reasons may play a role. Teslas too (TSLA) – Get report joining the S&P 500 a week ago is a potential catalyst.
The fact that S&P 500 index funds had to decorate their positions in FAANG shares and Microsoft (MSFT) – Get report to help make way for Tesla, the past few weeks have been a big windfall for the shares of many big technology names, and one that has now disappeared.
Meanwhile, the favor of Robinhood may be under pressure due to the increasing number of alarm bells that analysts and others are selecting over astronomical valuations, technology companies preferred by retail investors are allowed.
Over the weekend, The Wall Street Journal wrote a piece pointing out that for the first time in history, US margin debt rose above $ 700 billion. The WSJ also reported (citing data from Options Clearing Corp.) that the volume of the daily options contract increased by 48% this year and that inflows for leveraged and reverse ETFs reached the highest levels since 2008.
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