Big Tech Stocks Struggle, Bond Investments Holding Steady

As we march into 2024, the shares of the so-called 'Magnificent Seven' - a collective of prominent tech companies - have stumbled out of the gates. Despite this rocky start for stocks, the investment community maintains a positive stance on the bonds of these giants.

Among the group, six have issued bonds. Notably, Tesla Inc. previously offered convertible bonds, which have since transitioned to company stock. Throughout the past few days, these bonds have attracted net purchasing, in spite of a marginal increase in spread values.

Large investments have primarily centered on Amazon.com Inc., Apple Inc., and Microsoft Corp., according to BondCliQ Media Services. The rest of the ensemble includes Nvidia Corp., Alphabet Inc., and Meta Platforms Inc., all of whom are also witnessing investment activity.

The preference for these bonds persists even as the spread to U.S. Treasurys has widened somewhat during this period. With the 10-year Treasury yield rising above 4%, these blue-chip names still offer enticing yields.

On the stock front, Apple leads the descent, dropping 5.5% following analysis downgrades. Experts attribute the drop to concerns over the tech company's valuation and potential headwinds in the smartphone market.

Adverse market sentiment has also impacted other major tech corporations, with Amazon's shares declining by 3.9%, Tesla's by 3%, Nvidia's by 2.6%, Alphabet's by 1.2%, and Meta's by 1.4%. The Nasdaq Composite, too, is trending downward, signaling a challenging period for tech stocks.

stocks, bonds, tech