The so-called FAANG stocks — Facebook (FB – Free Report), Amazon (AMZN – Free Report), Apple (AAPL – Free Report), Netflix (NFLX – Free Report) and Alphabet (GOOGL – Free Report) — which were the biggest drivers of the nine-year bull run, are caught in a nasty broad market sell-off. Each of the five stocks has been falling persistently over the last six weeks and have now entered bear market.
From the 52-week high level, Facebook is down 39.5% while Netflix has plunged 35.6%. Amazon has lost 25.4% while Apple and Alphabet have slid more than 20% each. Collectively, the five stocks have lost nearly $1 trillion in value since hitting their respective 52-week highs, more than $300 billion in market value this month and about $575 billion since the start of October.
The decline stemmed from weaker-than-expected earnings and a disappointing outlook. Facebook has been hit hard following its third-quarter results wherein user growth slowed. After that, shares are declining on a raft of negative publicity surrounding its handling of foreign influence on the 2016 election. Notably, Facebook hit its lowest level since February 2017 on Nov 19 and is on pace to finish the third straight month in the red, which would mark the longest quarterly losing streak since 2013.
Amazon has been on a wild ride after issuing soft guidance for the holiday quarter, while Apple has dropped on the Wall Street report that the iPhone maker has slashed production of its three new iPhone models — XR, XS and XS Max — introduced in September. Meanwhile, Netflix and Alphabet slid with the rest of the FAANG stocks. In fact, shares of GOOGL slid to the bear market territory for the first time in seven years.
The turbulence was also triggered by global growth worries resulting from ongoing trade tensions, geopolitical uncertainty, slowing economic growth in China and emerging markets.
