Deciphering the FAANG phenomenon

THIS WEEK'S TOPIC: Is the recent technology sell-off a one-off correction or does it portend sustained and broader weakness beyond the tech sector ?

Kelvin Lee Chief Executive Officer Fundnel Ltd

THE sell-off of major US technology stocks is not surprising given the tech sector's sustained rally this year.

Tech has become a momentum play, and the recent sell-off could be due to near-term profit-taking or fund rotation, in the light of potential impending macro-events such as more rate hikes.

A large amount of tech stock growth is attributed to the FAANG (Facebook, Apple, Amazon, Netflix, Google) stocks, which gives a skewed overall representation.

Markets' reactions and views on the entire industry are heavily influenced by this handful of companies. The recent sell-off should be taken in this contex…