The megacap tech stocks have had a solid if not spectacular 2021. Heading into the final days of the year, Google parent Alphabet
has soared 67%, while Amazon.com
has only gained 5%, as founder Jeff Bezos exited for quite literally greater horizons. The NYSE FANG+
index, which includes the five core FAANG stocks (Facebook, Amazon, Apple , Netflix and Google) plus a handful more including Nvidia and Tesla, has gained 19% — underperforming both the S&P 500
and Nasdaq Composite
The artificial-intelligence Powered Equity ETF
seems to have caught on. It’s an exchange-traded fund that uses IBM Watson to pick stocks, and now it doesn’t have any of the megacap tech giants in its top 10 holdings. Jessica Rabe, co-founder of DataTrek Research, points out that as recently as September, Apple
Amazon and Alphabet were its top four positions, making up nearly a quarter of the exchange-traded fund. Even in November, Microsoft, Alphabet and Amazon accounted for about 15% of the fund. Now, only Apple of the FAANG stocks is in the portfolio.
What is the fund doing now? It still has a smattering of tech stocks in its top 10, led by microchip maker Advanced Micro Devices
but also investments including diabetes monitoring system maker Dexcom
and electrical-system maker Eaton
There’s also a bit of a cybersecurity theme with both Palo Alto Networks
in its top 10.
“AIEQ has been diversifying its holdings in a host of industries and putting most of its capital to work. That’s in contrast to this past September, for example, when it placed more concentrated investments in well-known companies amid that choppy month for U.S. equities. This latest approach reflects the current positive investment environment with the S&P near record highs,” says Rabe.
CEO Elon Musk sold another $1 billion of stock in the electric-vehicle maker, according to Securities and Exchange Commission filings, to pay the taxes for the exercise of a 1.55 million share option. That should wrap up his preplanned stock sales for this year.
The advanced trade in goods report is due, with pending home sales data set for release shortly after the open.
The World Health Organization reported that the number of COVID-19 cases worldwide climbed 11% last week, with Europe having the highest infection rate of any region.
were leaning higher after a pause in the rally on Tuesday.
The yield on the 10-year Treasury
was 1.49%. One big move was in European natural-gas contracts, with the lead U.K. contract
tumbling 8% as a combination of warmer weather, U.S. supplies and Norwegian output moved prices off recent highs.
Here are the top tickers on MarketWatch, as of 6 a.m. Eastern.
||U.S. dollar index|
||Dow Jones Industrial Average|
||E-mini S&P 500 futures|
||U.S. 10 Year Treasury|
This tax maneuver from the 1990s is now helping Silicon Valley tycoons save tens of millions of dollars.
These brothers have re-gifted the same candy since 1987.
Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.
Want more for the day ahead? Sign up for The Barron’s Daily, a morning briefing for investors, including exclusive commentary from Barron’s and MarketWatch writers.