U.S. stock market sell-off that began in early 2022 saw stocks tumbling down to enter a bear market. A bear market is, typically, defined as a fall of 20% in an index value from its recent highs. Nasdaq, Composite Nasdaq 100, and S&P 500 are flirting in the bear market territory and a reversal doesn’t look anytime soon unless macroeconomic factors improve. However, during the recent bear market rally, if it can be called so, there’s another tech-heavy index that is already up by 20% from recent lows.
NYSE FANG+ Index closed at 4695 on May 24 and is at 5621 level on August 4, a bounce of almost 20% in a span of a little over two months. However, a broad-based rally in stocks could be missing as the NYSE FANG+ Index represents a handful of stocks and all from the tech sector.
NYSE FANG+ is the index that tracks the performance of highly-traded growth stocks of technology and tech-enabled companies in the technology, media & communications and consumer discretionary sectors.
Unlike most other indices, NYSE FANG+ is an equal-dollar weighted Index and has 10 top global stocks in the index – Facebook (FB), Apple (AAPL), Amazon (AMZN), Netflix (NFLX), Google (GOOGL), Alibaba (BABA), Baidu (BIDU), NVIDIA (NVDA), Tesla (TSLA), Twitter (TWTR).
This makes it different from the tech-heavy Nasdaq 100 index as well. The NASDAQ 100 Index comprises of top 100 domestic and international non-financial companies listed on NASDAQ Stock Market while NYSE FANG+ holds only ten companies that are dominant players in the Internet and technology sector. The popular FAANG stocks – Facebook (FB), Apple (AAPL), Amazon (AMZN), Netflix (NFLX), and Google (GOOGL) – are a part of the NYSE FANG+ index and in addition, it has stocks of five other tech-enabled companies.
Although it has been a mixed bag as far as earnings of these top tech companies are concerned, it is the future outlook and the guidance provided by the management of these firms that have boosted the investor’s sentiments.