Attention from Trump makes Amazon the biggest loser among FAANGs
New York — Move over, Facebook. US investors have a new punching bag among the FAANGs: Amazon.com.
Facebook gave up the top loser spot to Amazon, which lost $53bn in market value on Wednesday after Axios reported that President Donald Trump was "obsessed" with regulating the e-commerce behemoth.
Facebook had previously underperformed Amazon amid concern about its handling of its users’ personal information.
The FAANG stocks, once assumed to be a monolith of performance, have suffered degrees of decoupling recently, including the outperformance by Netflix earlier in the year.
Amazon fell as much as 7.4% on Wednesday before paring some losses to close 4.4% lower after a Stifel Nicolaus analyst said the weakness created a buying opportunity.
Facebook diverged from the group in early trading, rallying 0.5% after announcing it was redesigning a menu of privacy settings in response to public outrage over the user data practices.
Netflix was the second-biggest loser in the FAANG group of stocks, sliding 5% on the heels of the #DeleteNetflix campaign.
"Netflix and Amazon haven’t really experienced the intense selling that Facebook did," said Michael Antonelli, an institutional equity sales trader and MD at Robert W Baird & Co. "The ‘flu’ that Facebook got is now spreading to the others."
The Axios report said Trump could target Amazon.com’s tax treatment. Whether this materialised or not, Axios said, it was not the first time he had put the retailer in his crosshairs.
On December 29, when he blamed the company for squeezing low prices from the US Post Office to deliver packages, the stock fell 1.4%. Trump has also called the company an antitrust violator in the past.
"In a nutshell, the FANG names and the Beltway continue to be on a ‘collision course’ in the eyes of the Street," said Daniel Ives, chief strategy officer at GBH Insights.
"With Facebook and regulatory worries swirling around tech names, the last thing nervous tech investors wanted to see today was news that Trump is targeting Bezos and Amazon over the coming months."
Despite Axios alleging that Trump is set on Jeff Bezos’s e-commerce hub, White House press secretary Sarah Huckabee Sanders stated otherwise when asked about the news at Wednesday’s briefing.
Sanders said the Trump administration was not considering any specific changes in regulations directed at the company.
Overall market weakness isn’t helping Amazon shares either. The Nasdaq 100 index lost 1.1%, on track to post the biggest monthly loss since January 2016. The S&P 500 index is down 0.3% to 2,605 after swinging between gains and losses earlier in the day.
The technical battle at 2,600 on S&P was "the most important thing to watch right now and if it holds, everything will bounce, including technology which has worse sentiment now", said Ilya Feygin, senior strategist at WallachBeth Capital.
"Growth equities can’t be abandoned completely and any bounce should see a nice pop."
Facebook and Cambridge Analytica have come under fire after a 2014 data harvest. Here’s how it happened.