U.S. equities are bouncing around the unchanged line on Monday as the post-election schizophrenia continues. The Dow Jones Industrial Average has been flirting with record highs, but much of the stock market and many other asset classes have been reeling from steep losses.
Bonds have been hammered on higher economic growth and inflation expectations stemming from president-elect Donald Trump’s plans for tax cuts and infrastructure spending. Gold has been crushed on the surge in the dollar. Emerging market stocks and equities are falling on fears of a pushback against free-trade deals.
But above it all is the selling pressure hitting big tech stocks pushing the divergence between the Nasdaq and the Dow to levels not seen since the Lehman Brothers fiasco.
This is being driven by Trump’s enthusiasm for a tightening of immigration, border strengthening and a likely crackdown on the abuse of skilled H1B visas used by Silicon Valley to import cheap programmers from India and elsewhere.
Here are five big tech stocks that are suffering and that investors should avoid:
Tech Stocks in Trouble After Trump: Apple (AAPL)
Apple Inc. (NASDAQ:AAPL) is down nearly 11% from its October high, closing in on its 200-day moving average which it has not touched since July, as a combination of Trump’s election and pitiful quarterly results soured sentiment on the market’s single most important stock.
The iPhone 7 has been a disappointment, a cautious and uninspired update of the iPhone 6 form factor that dumped the analog headphone jack for no good reason (breakdowns reveal no hardware components taking the space once occupied by the humble mini-jack).
Edge Pro subscribers are enjoying a whopping 343% gain in the November $110 AAPL puts recommend on Nov. 9. The company will next report results on Jan. 24 after the close. Analysts are looking for earnings of $3.23 per share on revenues of $77.1 billion.
Tech Stocks in Trouble After Trump: Facebook (FB)
Despite reporting solid quarterly results and solid user metrics, Facebook Inc (NASDAQ:FB) shares have collapsed below their 200-day moving average for the first time since 2013 — breaking a three-year-plus run that saw shares more than triple.
Sentiment has been hit by reports of inaccurate “news” posts by users — misleading many heading into the election — as well as the fact that CEO Mark Zuckerberg has been a big proponent of increased immigration — no doubt to help lower his company’s labor expenses.
FB will next release results on Jan. 25 after the close. Analysts are looking for earnings of $1.31 per share on revenues of $8.5 billion.
Tech Stocks in Trouble After Trump: Microsoft (MSFT)
Microsoft Corporation (NASDAQ:MSFT) shares have dropped back below their 50-day moving average, down 5% from the October high, as MSFT stock falls in sympathy with the rest of the tech sector despite a strong quarterly earnings result: On Oct. 20, the company reported better-than-expected earnings of 76 cents per share on a 3.1% year-over-year increase in revenue.
MSFT will next report results on Jan. 26 after the close. Analysts are looking for earnings of 78 cents per share on revenues of $25.3 billion.
Tech Stocks in Trouble After Trump: Amazon (AMZN)
Amazon.com, Inc. (NASDAQ:AMZN) shares are on the slide — something shareholders haven’t been forced to suffer since the beginning of the year — and are down about 15% from the early October high in the wake of a disappointing earnings report that broke a two-quarters run of surprise profitability.
The company’s aggressive hiring, building and investment spending dampened profitability despite impressive revenue — undercutting the expansion in the search of profitability strategy.
The company will next report results on Jan. 26 after the close. Analysts are looking for earnings of $1.36 per share on revenues of $44.7 billion.
Tech Stocks in Trouble After Trump: Alphabet (GOOGL)
Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) shares have dropped below the 200-day moving average for the first time since July, down nearly 10% from the recent high. This came despite GOOGL stock reporting better-than-expected earnings for the third quarter on Oct. 27 on a 20% year-over-year jump in revenues.
Investors are obviously concerned about the impact on profitability from higher labor costs.
The company will next report results on Jan. 26 after the close. Analysts are looking for earnings of $9.60 per share on revenues of $25.1 billion.