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GDP Gains But FANGs Repricing

Nell Sloane profile picture
Nell Sloane

The big economic news for last week came out on Friday as US Q2 GDP posted a decent 4.1%, estimates were as high as 4.4% but let's not lose sight of the fact that we haven't had a plus 4% print in nearly 4 years. This news wasn't enough to help the NASDAQ which, and as we have warned about sector rotation, has seemingly stung the tech sector. The NASDAQ lost nearly 1% on the week while the Dow gained 1.5%. The sector arbs seemed to dominate flows here as the NASTY has seen selling while the other indexes as a whole have seemed to benefit. Anyway, here is a quarterly chart of US Real GDP:

US GDP Growth

Whats your privacy worth.So, let's begin by talking about Facebook (FB). We have been hard on them ever since Zuck went in front of Congress and told us all that they don't sell data without consent. We posted this picture on the right in our July 2nd update. Facebook reported EPS of $1.74 on a 42% increase in revenue to $13.23 billion, slightly below analyst estimates. The stock was absolutely obliterated on Thursday, as shares fell 19% to $176.26 and evaporating $119 billion in market cap and reducing Zuck's share of value by $16 billion. Facebook warned about slower-than-expected revenue growth. We don't know how this would have taken anyone by surprise, given the nature of their congressional testimony and future potential lawsuits in the pipeline. If the Cambridge Analytica debacle didn't scare people, then you deserved to be taken out to the woodshed. Then again, we feel many investors experience cognitive dissonance when it comes to these markets. The never can fail mentality induced via a constant IV drip of global central bank largesse.

Alphabet ChartEarlier in the week Alphabet Inc. (GOOG) (GOOGL) reported

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Nell Sloane profile picture
Capital Trading Group, LLLP (“CTG”) is a Chicago-based investment firm focusing on alternative investment opportunities in futures and options markets around the globe. We provide comprehensive solutions for both investment managers – particularly Commodity Trading Advisors and for professional and individual investors.

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