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Big tech rally: Amazon at record high, Apple extends gains

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  • AMZN
  • NVDA
  • MSFT
  • XLK
  • AAPL
  • GOOG
  • GOOGL
  • XLF

Julie Hyman, Brian Sozzi, and Myles Udland break down the factors contributing to tech stocks such as Apple, Nvidia, and Amazon seeing surges in shares as growth continues.

Video Transcript

JULIE HYMAN: And we have been watching what's been going on with large cap tech as of late, as have the Yahoo Finance users. Because we've seen, really, a resurgence of the FAANG stocks on our trending tickers list. This sort of goes hand in hand with what we've been watching about the weaving in and out of the value versus growth trade, as we've watched that evolve over the past year or so since the onset of the pandemic.

Take a look inside the Yahoo Finance Interactive. Because we're looking at here a comparison chart of the S&P Technology ETF, the XLK, versus the financials, the XLF, just as representative of these two groups. This is a one-year chart. And you're seeing that, really, after the financials had been performing better for the year to date.

And here's a look at the two-year chart of these. So technology performing better over that period, but if you take it to one year, you have seen a flip of that script. And then if you just look over the past three months, we see a flip once again. So again, technology sort of coming back to the fore if you zeroed out and normalized these charts in these different time periods.

Another way to look at that is just to look at these charts of the individual movers. Amazon, for example, which we've been talking a lot about with Jeff Bezos leaving as the CEO, staying as chairman, and Andy Jassy taking the reins, but you see Amazon now hitting new record highs. We're looking at Apple potentially opening at a new record here today. So all of these stocks coming back in pretty decided fashion, Brian. And I know that's something that you've been watching as well, not just the FAANG stocks, with something like Nvidia, too, which has been on a big winning streak as of late.

BRIAN SOZZI: Yeah, this Nvidia move has been impressive. Investors currently buying, I think, the stock in advance of that $40 billion arms deal getting closed. But Julie, you mentioned Amazon. Over the past 24 hours, Amazon and Apple have been among the top two hottest trending tickers on the Yahoo Finance platform. I have not seen that for a while. We have had a year pretty much dominated by an AMC, a Bed, Bath & Beyond, and GameStop dominating this list, which tracks the hottest tickers on the platform. And that big cap tech trade has fallen by the wayside, but not right now, at least for the past 24 hours.

And I was walking in on the NYSE FAANG Plus Index that tracks the FAANG stocks very closely. That is up 17% since hitting a two-month low on May 12. Very interesting move here. The two stocks essentially powering that move here, Myles, is Amazon and Apple. Apple is the top performing FAANG stock over the past month.

MYLES UDLAND: Yeah, I mean, speaking of Nvidia, I would just like to posit that I think Nvidia should replace Netflix as the member of that group. Netflix shares flat over the last year. And it's been a good performing stock, but if you go back over the last five, it really hasn't been as exciting as Nvidia has been over that period. But I think that both the growth trade and then to see what's happening with yields, it's another-- I think it-- to me, it speaks to two things.

The first, which is an obvious point, which I think we can all see, is the market just falling into what's familiar. And I think that's to be expected through certain periods of transition. We obviously had a major shift in leadership for a several month period at the beginning of this year. You had the meme stock trade happening in the background of, you know, financials and value, cyclicals, small caps doing so much of the leading for, really, what, six months, eight months.

And so to see some rotation back into what worked not just in 2020, but worked for years, which is betting on low rates and high growth tech stocks, I think, makes some sense. And then also just the speed with which the rotations in and out happen, especially this quick move that we've seen into tech. It really didn't get started until early June in the run-up to that Fed meeting. And then, of course, it has continued as we get into the second half of the year.

And we've remarked several times over the last-- well, I guess, really, the whole time I've been here at Yahoo Finance. But one of the foundational themes for me in terms of following markets is just the speed with which things happen, where it goes from no one is talking about this to everyone talks about it. Oh, wait, the move is done. And I think that we see a lot of that playing out with this little mini rotation as well.

JULIE HYMAN: Yeah, just wanted to mention real quick what we're looking at on the screen is sort of representative of what you're talking about, Myles, and that's the ARK ETF, the Arkoverse, as you like to call it, that we've talked so much about that had such a dismal spring, right, as we saw this trade coming off. It's coming back, right? And value is coming off a little bit in comparison here. We're looking at the iShares MSCI Value ETF just as a point of comparison, just another way, again, to sort of express what it is that we're talking about.

BRIAN SOZZI: Now let me go back real quick to what Myles mentioned, the 10-year yield and the rise in tech stocks. It is fascinating. And Julie, you flagged this before we came on air. The 10-year is, what, close to 1.3%. The move down since the Fed meeting has been absolutely remarkable. But that has caused this rotation back into tech stocks.

And if you take the FAANG, the NYSE FAANG Plus Index and overlay it with the 10-year yield, you could pretty much see that index start to take off just as the 10-year yield started to fall. So Myles, right, you're right on. To your point, tech stocks are probably likely to continue that bit higher for as long as the 10-year remains, that bias remains to the downside.

MYLES UDLAND: Yeah, and, you know, look, I'm poking fun a little bit, a little bit of a cheap shot here at the folks who have been calling for higher yields for the last 30 years, 40 years in some cases. But there's an inherent pessimism in saying that inflation is going to run rampant. There's also an inherent pessimism in low interest rates and low yields. Of course, those are on opposite sides of how you would trade an inflationary event. And so, to see that coming to the market is always-- it's always an interesting sort of pretzel here for folks.

JULIE HYMAN: Yeah, and it is an interesting thing that we always talk about, stocks being a discounting mechanism. I mean, what is the bond market telling us right now about the future pace of economic growth? We know there are concerns maybe about we're a peak, it's going to slow. But is it going to slow such that 1.3% is warranted on the 10-year? I guess that's something we'll have to just wait and see.