8 months ago
How Tech Dependent Is This Stock Market?
Facebook (FB) Apple (AAPL), Amazon.com (AMZN), Microsoft (MSFT) and Alphabet (GOOGL), otherwise known collectively as FAAMG -- have accounted for roughly 40% of the Standard & Poor’s 500’s gains this year. Cliff Asness, an influential quant hedge-fund manager, is trying to debunk the notion that the stock market is all that dependent on the performance of a handful of big-tech names. Writing on the website of his firm, AQR Capital Management, Asness argues that “Any way you slice the data, there isn’t anything truly exceptional about the last two calendar years even if you extend the period to include the strong 2017 FAANG performance through May.” Asness continues: “In this case the “why” is pretty simple — calendar year 2016 was not a particularly great year for the FAANGs (and you may notice the news stories indeed died down for a while).‘’ He points out that Old Economy stocks like JPMorgan Chase (JPM), Bank of America (BAC) and Chevron (CVX) were among the top contributors to S&P 500 returns last year, while the FAANGs performed more in line with the rest of the market.