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Tech stocks lose over $1 trillion in value over 3 days

Yahoo Finance Live anchors discuss the sell-off in stocks led by the tech giants.

Video Transcript

JULIE HYMAN: So we start our three things that you got to know this morning with what we've seen over the past couple of days to put this morning's move in the futures in context, which it is very important to do. So let's take a look, first of all, at the Dow Jones Industrial Average, at the three-day chart of it, and the 5.3% slump that we have had over that period of time. We've got the S&P 500 over the three-day period down about 7% here. And finally, the NASDAQ Composite down 10% in just the last three days alone.

If you look over the past three days-- and I've been zooming in on the NASDAQ 100, which is the index of the largest cap stocks within the NASDAQ 100-- I've been zooming in on that. Over the past three days, only 5 out of 100 stocks in this index were higher over that period of time. 36 out of the 500 in the S&P 500 were higher over that period of time. And the S&P 500 having its biggest three-day slide going back to March of 2020.

I've also been looking back-- taking it back a little bit further here, as well, to look at what we have been seeing since the highs. So if you take a look-- let's call it the one-year year chart, shall we? And take a look at what we have seen since the highs that we saw for the S&P 500. For the S&P, it made its high back on January 3. Since then, the index is down some 17%. So not quite in a, quote, unquote, "bear market." It's not 20% down from top to bottom. But it's getting close to that level, isn't it?

And for-- of course, if you're looking at something like the NASDAQ 100, it is in a bear market and then some. So in this case, we saw it make its high earlier. Let's see. Right around here. That was November 19. Since then, it is down some 26%, guys. So-- you're laughing at my drawing on the chart, Brian?

BRIAN SOZZI: That is expert, big board-- I mean, you don't even need me and Brad today. I mean, just stay up there till two hours and talk about bearish markets and chart formations. But let's stay on this route here, because techs mega caps have shed more than $1 trillion in value over just three trading sessions since the Fed announced its rate hike last Wednesday. Apple, Microsoft, Tesla, Amazon, Alphabet, Nvidia, and Meta all lost billions in value over the past three trading days, with Apple the biggest loser at $225 billion.

And guys, look at that chart here. You have the household name stocks that are owned by many institutions just continuing to get hammered. And I think that, looking back now, that quarter from Netflix a couple of months ago-- about a month and a half ago really was the tell that things were about to get ugly in the tech space. And what bothers me here now, you're not seeing the big name bars. Where's a Bill Ackman coming out here with a big purchase on a tech stock?

He was a seller of Netflix. He exited completely, which to me continues to be a red flag.

BRAD SMITH: Yeah. I think coming back to Netflix, of course, when we think about the churn that took place there, it's not just the deceleration in growth. It's the churn. And for these high-growth internet names, where that continues to remove some of the luster for getting into those stocks and, quite frankly, to the other side, it's led to this heavy selling, and also kind of compounded with this rising rate environment, too, that's certainly hit tech stocks hard.

And so, I think going forward from here, when we hear from some of these companies increasingly on and over the course of the earnings season, but even around some of the results that we've seen and forecasts that we've seen thus far, there's not really a reprieve to be seen in this immediate near term.

JULIE HYMAN: You know-- and there are buyers in this market. They're just buying at lower prices.

BRIAN SOZZI: I can't see them. I can't find them. If you're buying tech, please send us a tweet.

JULIE HYMAN: You-- people are buying. They're just buying at lower prices. You know, I come back to my word of the year-- rerating. That is what we are seeing. These companies are not going away, right. Meta, Apple, Amazon, Microsoft, Alphabet-- these companies all have very sound and valid business models. But what are they worth? And obviously, they're worth, in investors' minds, they are worth much less than they were.

And I also feel like the recession talk has just ratcheted up and ratcheted up and ratcheted up to the point where, clearly, it is invading public consciousness. Already, I feel like inflation was on their minds. Now, with all the recession talk, that's on people's minds as well. I'll tell you one people who's buying though-- Marko Kolanovic over at JP Morgan.

He is a very, very highly-watched strategist. He's been bullish. And apparently, he is sticking to his bullish stance. He says he remains constructive on equities, fears over an economic recession are unjustified, as reflected in certain parts of the market. So there are buyers.

BRIAN SOZZI: You know what terrifies me? If you look at Netflix, down, what, 70% year-to-date or so. Has it priced in a recession yet? Because-- are they going-- is it going to get cut in half again? It's unclear. I mean, what if we do get a recession in this country? Do you certainly now-- do you now see Netflix trading at a single-digit price-to-earnings multiple? It's about market multiples.

JULIE HYMAN: But isn't that already happening? In other words, we know markets are a discounting mechanism with a lag. So is Netflix maybe pricing in a recession now, or is it just-- or is it just "only" pricing in a dramatic remaking of its business or a dramatic remaking in investors' minds of the growth prospects of the business? In other words, are we already pricing in a recession for some of these companies? I don't know the answer to that.

It's not like when we get two quarters of economic contraction then stocks fall. They fall before it happens, typically, right.

BRAD SMITH: Right. And when the business model shows, like, a glaring red flag warning as well, especially in the case of Netflix here too.

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