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What trade war? FAANGs scale new highs

Published 06/20/2018, 02:54 PM
Updated 06/20/2018, 03:00 PM
© Reuters. FILE PHOTO: Amazon boxes are seen stacked for delivery in the Manhattan borough of New York City
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By Savio D'Souza

(Reuters) - Four of the five so-called FAANG stocks – Facebook, Alphabet, Amazon and Netflix – surged to all-time highs on Wednesday, with only Apple spoiling a perfect scorecard.

The five heavyweight stocks also powered the Nasdaq Composite (IXIC) to a record high and helped the broader S&P 500 (SPX) shrug off concerns over tariffs between the United States and China.

Trade war worries have limited the benchmark S&P 500's gain to about 3.5 percent this year, but the FAANG group, whose businesses are largely immune to trade and tariffs, has surged 10 times in this period.

"We're seeing a big question mark over global trade ... and whenever you see the market get in trouble, it's always important to look for leadership and isolate strength," said Adam Sarhan, chief executive officer of 50 Park Investments in New York.

"Right now FAANG stocks are leading and acting very well."

The NYSE Fang+ Index <.NYFANG>, which includes the five core FAANG stocks, also hit a record high on Wednesday.

Facebook Inc (O:FB) jumped as much as 3.1 percent to a record high of $203.55, topping $200 for the first time ever.

Google-parent Alphabet Inc (O:GOOGL) rose 1.9 percent to $1,201.49, taking out its previous record of $1,198 hit on Jan. 29.

Amazon.com Inc (O:AMZN) rose 1.6 percent to $1,762.93, hitting an all-time high for the third session in row and Netflix Inc (O:NFLX) climbed 3.5 percent to $419.17, a day after topping $400 for first time ever.

Apple Inc (O:AAPL) hit a session high of $187.20, still 3.7 percent shy of its record of $194.20 hit on June 7.

Even among the group, there were clear winners.

Netflix has surged about 120 percent in 2018, more than double the roughly 50 percent increase in Amazon, the next best stock.

A distant third is Facebook, now up about 14 percent for the year after recovering from a slide in the wake of the Cambridge Analytica scandal. Just behind it is Alphabet, with a 11.5 percent gain.

Lagging the group with an increase of about 7 percent is Apple. Its stock this year has been weighed down by persistent fears over slowing demand for its new iPhones.

© Reuters. FILE PHOTO: Amazon boxes are seen stacked for delivery in the Manhattan borough of New York City

Nonetheless, the FAANG group, according to a Bank of America Merrill Lynch (NYSE:BAC) poll, was the most "crowded" trade by investors for the fifth month in a row in May.

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