Infographics: US Stocks Pillared by the FANG, Otherwise the Market has NO Bite

Courtesy of: Visual Capitalist

From the Visual Capitalist:

FACEBOOK, AMAZON, NETFLIX, AND GOOGLE CREATED OVER $440 IN VALUE OVER 2015

In the sixth year of the bull run, the U.S. large cap market has had its ups and downs. The S&P 500 peaked at 2134.7 in the early summer months, and promptly collapsed to 1867 points during the August flash crash.

Today, it’s back in black, but only trading just over 1% higher than it started the year.

The only reason that has made this possible is the legendary performance of four tech stocks: Facebook, Amazon, Netflix, and Google (now called “Alphabet Inc.”). Together, the “FANG” stocks have created an impressive $440 billion in market capitalization since January.

For comparisons sake: that’s over 2/3 the size of Apple’s current market cap.

The FANG stocks comprised just over 3.5% of the weight of the S&P 500 index at the beginning of the year, and now they make up 5.1%. They’ve carried the market, and without them the S&P 500 would surely be in negative territory today.

Looking at these companies individually, probably Amazon (AMZN) has been the most impressive over the course of the year. While it didn’t shoot up the 143% that Netflix (NFLX) did, Amazon had a similar performance despite being over 6x the size of Netflix. Amazon is now bigger than Facebook in terms of market cap, and achieved a gain of 116% through the year.

The only problem is that it is now the most expensive stock on the index, at a seemingly ludicrous P/E ratio of 966. The other stocks are expensive as well: Netflix and Facebook are trading at 329 and 108 times earnings respectively. Google is the lone palatable company from that perspective, trading at only 35 times earnings.

This raises the question of how long the FANG stocks can carry the load, and if their work is done.

If so, who will step up to the plate?

More graphics to bolster the concentration of gains that have masked the deterioration in market breadth

The Fab Five (Fang + Microsoft) Total returns from M.Shedlock/Market Oracle 

The Fang + NOSH (Nike O'Reilly, Starbucks and Home Depot) from Goldman Sachs/zero hedge

The S&P 500 based on equal weighted market cap at 3 year lows (Dana Lyons)

Finally, the Nasdaq's equal weighted market cap also at 3 year lows (Zero Hedge)

This resonates with the dynamics at the Philippine Stock Exchange in particular, through the headline index, the Philippine Phisix. 

The PSEi's record high at 8,127 last April was entirely based on a rotational pump of the top 10 of the 15 largest market cap issues. This landmark high occurred even when HALF of the PSE universe (main index+ sectoral indices + non index issues) had astoundingly been in bear markets!

The probable difference between US and Philippine stocks have been in the latter's rampant price fixing activities made by unidentified parties. Market manipulation at Philippine Stock Exchange, via the rotational pumps on the top 10 issues especially from the serial "marking the close", had been instrumental in powering the Phisix to record highs.