There have been numerous warnings this year that the recent bull market is turning bearish. Tech-related stocks have been hard hit by volatility. Bearish conditions don’t guarantee a widespread bear market, but, when large cap stocks start to fall, market confidence does the same. The following are some of the worst affected NASDAQ stocks that might suggest a Bear market is incoming…
Netflix (NASDAQ: NFLX) has dropped -28.52% in three months, putting it well into bear territory when considering intraday movement. However, robust growth in the mid-year has protected some investors. Netflix is still up 36.90% year to date.
Alphabet (NASDAQ: GOOGL) has dropped -12.2% in three months and is so far down -2.63% for the year. Alphabet has faced heavy corrections and shrinking market capitalization. While the company can still display strong revenue growth, the investor confidence in the tech sector is just not there today.
Facebook (NASDAQ: FB) has dropped -12.55% in three months and is down -21.90% year to date. Facebook has weathered multiple privacy scandals this year and could be subject to a $1.6B fine in Europe for failing to protect user data. Investor confidence is low following several operational blunders. Notably, however, Facebook revenue is still growing year-on-year.
Amazon (NASDAQ: AMZN) has dropped -21.64% in three months, putting it well into bear territory. Fortunately for patient investors, stock is still up 30.05% year to date. Amazon continues to grow its revenue at record pace, and stock value would likely be higher in a more confident market.
Apple (NASDAQ: AAPL) has dropped -24.88% in three months and -3.13% for the year to date. Apple exceeded $1 trillion in market capitalization earlier this year, but now sits below $786 billion. Apple has suffered heavily from trade uncertainties, potential tariffs, and a slowing of the microchip market. iPhone sales have also disappointed some analysts.
Don’t Panic About Bear Market Just Yet
Bear market are usually tied to poor economic conditions. However, today’s economy is strong and is still growing, even if the rate of growth is decreasing. Most analysts are advising investors to hold, because there is still some belief that the market could recover in 2019. A better trade relationship with China and a slowing of federal rate increases could be instrumental in rebuilding confidence.
Bear Market stocks are important bench marks, but your investment decisions should be based on research of all factors, taking wider economic and individual company performance into account. Many of the companies that have lost the most value in 2018 are also some of the most fiscally sound, and researching the financials could help to keep future potential in perspective.
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