It is shaping up to be an ugly month for the overall equity market, but it could be an even worst stretch for the cadre of stocks that have generated the most bullish momentum for Wall Street since March.
A contingent of highflying technology-related companies, consisting of Facebook Inc. FB, +2.12%, Amazon.com AMZN, +2.49%, Apple Inc. AAPL, +3.75%, Microsoft Corp. MSFT, +2.27% and Google parent Alphabet Inc. GOOGL, +1.13% GOOG, +1.16%, are on track for their steepest monthly fall on record, according to Dow Jones Market Data.
Approximately $817 billion of market value has been lost by the quintuplet of heavy weights so far in September, which puts the group on pace for the steepest monthly slump on record.
The runner-up for worst month for the collective of stocks isn’t even close, with October 2018 seeing about $425 billion of value erased during the period.
Netflix NFLX, +2.07%, meanwhile, considering a part of the traditional group of popular tech-tinged companies, known collectively as FAANG, has lost about $24 billion of its value, its steepest monthly slide in value since October of 2018.
Apple, the behemoth of the group, and the largest company in America by market value, so far shed about $322 billion of its value in September thus far, which would represent its most sizable contraction, based on market capitalization, in the company’s history.
To be fair, Apple has made gargantuan moves higher since the broader market hit a coronavirus rock-bottom level on March 23. Since that point in late March, Apple has added an astonishing $934 billion to its market cap.
Facebook, Apple, Amazon, Microsoft and Alphabet have climbed a combined $2.6 trillion, Dow Jones Market Data show.
That stratospheric rise for the group has helped to the Dow Jones Industrial Average DJIA, +1.33%, the S&P 500 and the tech-laden Nasdaq Composite Index clamber higher from the worst of the COVID-19-inspired selling in the spring.
Tech’s stall out raises some questions about the market’s ability to make further traction higher, with the Nasdaq Composite COMP, +2.26% in correction as of Sept. 8, defined by a fall of at least 10% from a recent peak. The S&P 500 SPX, +1.59%, meanwhile, is fending off its own bout of a retrenchment into corrective territory, while the Dow came awfully close, but failed to achieve a fresh high since its Feb. 12 peak.
“September has been a rough month for all investors, but tech has really taken one on the chin,” wrote Lindsey Bell, chief investment strategist at Ally Invest, in a Friday research note.
Indeed, September was shaping up to be, as its historical billing promises, one of the worst months for the stocks in nearly 20 years.
Bell says investors should stay the course rather than get too worked up about the current volatility that has picked up in the market on the back of concerns about a lack of stimulus, fear of the aforementioned run-up in stocks, and rising concerns about COVID-19 infections.
“Tech’s story is bigger than this September dip,” Bell said.
“The pandemic has forced companies and consumers to push for tech-heavy solutions during quarantine, and that shift shows no signs of slowing.”