Those “highflying FAANG stocks” haven’t exactly lived up to their billing in recent months, but the longtime leaders of the bull market did help the S&P 500 index
break into record territory on Inauguration Day.
in particular, provided a strong tailwind on Wednesday, having logged a double-digit rally to notch all-time highs. That kind of action, according to Jani Ziedins of the Cracked Market blog, is a strong indications that this latest push has legs.
“The biggest red flag of the S&P 500’s recent strength was the lack of participation by this country’s best companies,” he said in a blog post this week. “But as the saying goes, better late than never. The FAANG stocks are getting their mojo back.”
Even as the broad market held up strong in the face of growing political discord in the aftermath of the election, he pointed out that Facebook
Netflix and Google
gave up their leadership position to value and smaller tech names.
“These best-of-the-best companies have been struggling to pull themselves off of recent lows and were stuck in consolidation patterns,” he wrote. “Some of this underperformance makes sense since Democrats have been vocally targeting these titans of tech for their anticompetitive business practices.”
He said that removing Trump from Twitter
and Amazon taking down Parler raised concerns about Big Tech and what’s to come.
“But as the popular saying goes, it is darkest right before the dawn,” Ziedins said, pointing to Netflix’s big post-earnings move, as well as Alphabet’s fresh record highs.
The tech sector managed to hold on to recent gains, with the Nasdaq Composite
in green territory during Thursday’s session. The Dow Jones Industrial Average
and S&P 500, however, lost ground.