U.S. Secretary of State Mike Pompeo says Huawei CFO Meng Wanzhou, who is under house arrest in Canada and facing extradition to America, is not a bargaining chip in the trade...Technologyread more
Arturo Estrella has a message for recession naysayers: It could hit sooner than you think.Marketsread more
Local governments commonly share single service providers, making many vulnerable at once. On top of this, ransomware has often been used to mask more targeted, malicious...Technologyread more
Fed Chairman Jerome Powell faces the tough challenge of presenting a unified voice on Fed policy from the most divided Fed in years.Market Insiderread more
Meanwhile, investors look ahead to Fed Chair Jerome Powell's speech at a yearly central banking symposium in Jackson Hole, Wyoming.Asia Marketsread more
The office has long been a breeding ground for budding romances. But actively going into business with your other half is another thing entirely.Successread more
Salesforce released its first earnings report since its $15.3 billion acquisition of Tableau Software, the company's largest deal ever.Technologyread more
Kudlow also confirmed to CNBC that he supported a tax cut proposal floated earlier Thursday by Sen. Rick Scott, R-Fla.Politicsread more
VMware is following through on its proposal to buy Pivotal, a fellow Dell subsidiary, and expanding into cybersecurity with the acquisition of Carbon Black.Technologyread more
Google says it shut down hundreds of YouTube channels tied to misinformation around the Hong Kong protests.Technologyread more
It is a rare scenario where long-term interest rates suddenly fall below short-term interest rates.Real Estateread more
This week kicked off with more bad news for tech stocks, dragging major U.S. indexes into correction territory and prompting one expert to compare them to a famed institution that has seen its own historic ups and downs.
"All these tech stocks in America or other parts of the world are a little bit like the British royal family," said David Marsh, managing director at think tank the Official Monetary and Financial Institutions Forum (OMFIF). "You put them on a pedestal one day and they're great … And you knock them off the next day."
Indeed, the last year saw tech stocks, in particular the FAANGs — Facebook, Amazon, Apple, Netflix and Google — hit record highs. Now, amid growing fears of regulation and a number of companies hit by scandal, production problems, testing accidents or President Donald Trump's Twitter ire, the much-vaunted sector is facing a mounting sell-off.
"It's quite clear that some of these tech stocks got to stratospheric levels not justified by real life," Marsh said. "And therefore whether it's Mr. Trump or worry about some vehicle going off the road and killing people, there are lots of very justifiable reasons I think to sell. I think the correction has only just started."
The S&P 500 and Nasdaq closed at their lowest levels in nearly two months Monday, while the Dow Jones was down 11 percent from its record highs. The S&P's tech sector was down by 2.48 percent by the end of the trading day.
Heated tweets from the U.S. president targeted Amazon this weekend and sent shares down sharply, sparking concern over what measures the government might take on taxes and regulation. But prices were bound to drop regardless, Marsh told CNBC Tuesday, because the sky-high valuations of the previous year were simply unsustainable — and there may be further corrections to come.
Too much money has been herded into too few stocks, said Robin Griffiths, chief technical analyst at the at U.K.-based currency investment firm ECU Group, which means we're likely to see a rotation out of the tech sector as investors attempt to de-risk.
"All of the FAANG stocks had become too high by normal valuation standards," Griffiths said, describing the market as a "mania" that needed to be corrected.
Cheaper non-tech stocks, as well as assets beyond equities and outside of investors' home markets, will be the beneficiaries of this so-called rotation, Griffiths predicted.
But not all FAANGS are created equal, and while the tech sector may appear under siege, companies are certainly not all in the same boat.
"It's no longer a homogenous group," Griffiths said. He cited Facebook, which has been plagued by the Cambridge Analytica scandal involving misuse of private user data, as having uniquely dire problems.
Indeed, it has been a divergent year for tech stocks. Year-to-date, Netflix shares have grown by an eye-popping 46 percent, Amazon by 17 percent and Twitter by 16.7 percent. Meanwhile, Apple has dipped 1.5 percent since January 1 and Snap has come down 1.3 percent.
And investors are starting to discern between these different stocks — whether it's examining Tesla's production issues, the effect of a U.S.-China trade war on Apple, Netflix's user numbers, Snap's redesign popularity, regulation of social media companies, or the safety of driverless vehicle testing.
Richard Harris, chief executive at Port Shelter Investment Management, stressed the importance of this differentiation, suggesting that despite the current picture, stocks overall have further room to rally.
While there are concerns in the tech sector over whether some of these stocks have "gone too far," Harris told CNBC Tuesday, "the whole FAANG issue, I think, is being broken apart. I think Facebook looks vulnerable, I don't see many of the others looking as vulnerable."