<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



Big technology stocks sank Tuesday, a potentially worrisome omen as the darlings of 2023’s explosive gains lost hundreds of billions of dollars of market value.



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



The tech-heavy Nasdaq Composite fell 1.6% in the opening trading session of the year, a far wider loss than the Dow Jones Industrial Average’s 0.1% gain and S&amp;P 500’s 0.6% fall.



Tuesday was the Nasdaq’s worst day since October 25 and its lowest closing price since mid-December.



<a href="https://www.forbes.com/sites/dereksaul/2024/01/02/apple-shares-stagger-3-after-lackluster-iphone-sales-earns-rare-analyst-downgrade/?sh=dd328e23c42b">Driving</a>&nbsp;much of the tech slump was a 4% drop by Apple’s stock, a dive precipitated by an analyst downgrade questioning why the $2.9 trillion (market capitalization) company is trading at such an expensive valuation considering its negative earnings and profit growth.



Other members of the “magnificent seven” tech stocks, which gained a collective $5.1 trillion in market cap last year, also flailed Tuesday.



Alphabet, Amazon, Meta, Microsoft, Nvidia and Meta each fell 1% or more, while Tesla was the sole magnificent seven member left unscathed, as its shares were flat after the automaker reported more fourth-quarter electric vehicle deliveries than forecasted.



<h2 class="wp-block-heading" id="h-big-number">BIG NUMBER</h2>



About $238 billion. That’s how much market value the magnificent seven lost Tuesday.



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



The Nasdaq rose more than 40% in 2023, erasing most of 2022’s historic losses and easily outperforming the Dow and S&amp;P’s respective returns. Much of tech’s gains were due to investor optimism about the longer-term profitability for breakthroughs in generative artificial intelligence, rather than a corresponding uptick in earnings, leading to&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/04/10/these-7-tech-stocks-command-almost-90-of-the-sp-500s-gains-signaling-market-rally-may-not-be-so-healthy/?sh=b80b39d65d55">concerns</a>&nbsp;about the health of the rally.



<h2 class="wp-block-heading" id="h-surprising-fact">SURPRISING FACT</h2>



Microsoft is now just $130 billion behind Apple for the title of the world’s most valuable company, a mantle held by Apple since late 2021.

Markets Open After Falling More 800 Points On Tuesday

Apple Stock’s Plunge Spurs $200 Billion Big Tech Rout As Nasdaq Tallies Worst Day In Months

Bill Ackman panicked about the coronavirus early on.



The billionaire investor had a nightmare about COVID-19 in late January, which might as well have been the plot of the pandemic thriller&nbsp;Contagion. When he woke up, he started prepping.



He began arranging for his firm’s fifty employees to abandon their midtown Manhattan offices. He put on doomsday hedges. And then he pulled an enormous amount of cash from an ATM. By the time the Dow Jones Industrial Average was plunging seemingly a thousand points a day, Ackman’s $5.6 billion firm was making money amid the chaos.



So when he woke on Wednesday morning, Ackman didn’t have a pleasant message for America. He took to Twitter to recommend <a href="https://www.forbes.com/sites/antoinegara/2020/03/18/hedge-fund-billionaire-bill-ackman-calls-for-30-day-shutdown-of-country-closing-of-borders-to-curb-covid-19-spread/#4d6686425571">a shutdown of the country</a>.



<figure class="wp-block-embed-twitter wp-block-embed is-type-rich is-provider-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">Mr. President, the only answer is to shut down the country for the next 30 days and close the borders. Tell all Americans that you are putting us on an extended Spring Break at home with family. Keep only essential services open. The government pays wages until we reopen.&mdash; Bill Ackman (@BillAckman) <a href="https://twitter.com/BillAckman/status/1240244507246919681?ref_src=twsrc%5Etfw">March 18, 2020</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Then he called into&nbsp;CNBC&nbsp;around noontime to elaborate. And it was bad.



“Hell is coming,” said Ackman, in a frenzied 28-minute interview. “Shut it down now,” he said of the economy, “There is a tsunami coming.”



Ackman recommended President Trump effectively close the country for 30 days and shut the borders to stop the spread of the coronavirus. Yes, it would mean an economic disaster, so Ackman recommended that Trump call a national ‘Spring Break’ and have the government pay wages, halt foreclosures, and help with other monthly bills like rent to tide people over.



This way Americans will stay at home and the virus will stop spreading.



If not, Ackman warned in an emotional interview that verged on panic, the country will experience a prolonged pandemic, which will put many industries ranging from hotels, to restaurants, to real estate out of business.



“What’s scaring the American people and corporate America now is the gradual roll-out,” said Ackman, of containment and distancing measures. “Capitalism does not work in an 18-month shutdown, capitalism can work in a 30-day shutdown.”



The hedge fund manager, turned amateur health expert, said the contagiousness of the virus may mean millions will die without drastic measures. He choked up when talking about the risks of the disease to his elderly father, and revealed that some of his employees may have the virus.



“The only shared sacrifice that is going on right now is the healthcare community, the nurses, the doctors, the people taking care of patients,” said Ackman. “The president is not saying storm the beaches of Normandy,” he said, hypothetically, of his 30-day shutdown proposal. “He’s saying go home, spend a month with your family.”



When Ackman turned to his portfolio and the rest of Wall Street, his warnings were dire.



“Hilton is the canary in the coal mine,” said Ackman of the hotelier, which is one of his larger holdings. Without quicker action, “it’s going to zero along with every other hotel company,” he predicted. Though, he did say his Pershing Square was buying shares of Hilton as markets plunged on Wednesday morning.



“I have enormous respect for KKR and Blackstone,” Ackman added of the two illustrious private equity firms, before predicting their leveraged deals would be toast if there isn’t a quick solution within the next 18-months. “[E]very one of their companies goes bankrupt,” he said.



After the interview,&nbsp;Forbes&nbsp;has learned Ackman called Blackstone and said he’s buying the firm’s shares.



His ideas were boundless: He recommended Elon Musk convert Tesla’s car-making factories into ventilator-making factories.



As he spoke, the market plunged, tick-by-tick.



The Dow Jones Industrial Average was down over 1,000 points when he went on air. It hit a circuit breaker as he spouted dark doom and gloom, then closed for 15 minutes. When it reopened, it was down 2,000-plus.



<figure class="wp-block-embed-twitter wp-block-embed is-type-rich is-provider-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">Ackman just halted the market.&mdash; Nathan Michaud (@InvestorsLive) <a href="https://twitter.com/InvestorsLive/status/1240321527024844804?ref_src=twsrc%5Etfw">March 18, 2020</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Some on Twitter took Ackman’s dire warnings as necessary.



His “shut it down now” idea, increasingly, is becoming the pandemic playbook for cities either implementing or considering “shelter-in-place” laws. And, in recent days and weeks, health experts have responded positively to market-tanking warnings by public officials about the virus.



Many commended President Trump for talking about the gravity of the pandemic earlier in March, even though it was the catalyst for a sudden market drop. Before Ackman went on air, Dr. Deborah Birx, the head of the White House Coronavirus Task Force, said many people, particularly young people, are not taking the pandemic seriously enough. Her message to millennials? You can die from this.



However, others saw a panicked billionaire investor talking down the market and inciting fear.



<figure class="wp-block-embed-twitter wp-block-embed is-type-rich is-provider-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">Please get Ackman off CNBC before people start jumping off bridges. <a href="https://twitter.com/CNBC?ref_src=twsrc%5Etfw">@CNBC</a>&mdash; Mike Novogratz (@novogratz) <a href="https://twitter.com/novogratz/status/1240321462621351936?ref_src=twsrc%5Etfw">March 18, 2020</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Ackman then went back on Twitter to clarify his intentions. “These are the bargains of a lifetime if we manage this crisis correctly,” he said.



<figure class="wp-block-embed-twitter wp-block-embed is-type-rich is-provider-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">Some investors have been confused by remarks. To clarify, I am confident the president will do the right thing in temporarily shutting down the country and closing the borders. If that happens, we can win the war against the virus and the markets and the economy will soar.&mdash; Bill Ackman (@BillAckman) <a href="https://twitter.com/BillAckman/status/1240351178933895169?ref_src=twsrc%5Etfw">March 18, 2020</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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 You can watch Ackman’s CNBC interview in full here. (Pershing Square declined to comment further.)



<figure class="wp-block-embed-twitter wp-block-embed is-type-rich is-provider-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">Watch the full interview with Bill Ackman on the coronavirus threat to economy — &#39;Shut it down now&#39; <a href="https://t.co/nSDK8lwKec">https://t.co/nSDK8lwKec</a>&mdash; CNBC (@CNBC) <a href="https://twitter.com/CNBC/status/1240339659709915138?ref_src=twsrc%5Etfw">March 18, 2020</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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&#8211; <a href="https://www.forbes.com/sites/antoinegara/">Antoine Gara</a>, Forbes Staff, <a href="https://www.forbes.com/banking-insurance">Banking &amp; Insurance</a>

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The Billionaire Interview That Tanked The Stock Market

Few people would have disagreed at the beginning of the year that the nine-year-long bull market was reaching its end phase. That didn’t diminish the shock when it actually happened. Here is Breakingviews’ imagined account of how the good times came to an end in 2019.



<hr class="wp-block-separator"/>



Day 1 – The market opens on an unremarkable Monday. A mid-sized maker of car fan belts files for Chapter 11, blaming European tariffs levied in response to U.S. trade barriers. Three hours later, Facebook announces a data breach, which it attributes to alt-right Generation Z whiz-kids with possible links to Russia. Investors, jittery over the impact of trade war and tech-sector weakness, start to sell. The S&amp;P 500 Index slumps 4 percent, financial and internet stocks bearing the brunt.



Day 2 – Tech stocks fall further and faster. That afternoon, President Donald Trump takes to Twitter to call Federal Reserve Chairman Jerome Powell an “ENEMY OF THE PEOPLE” for his reluctance to cut rates. Later at an event, Powell emphasizes that the Fed is not on a pre-set course, but stocks&nbsp;only slide further. Trump muses on replacing the Fed chief with wrestling promoter Vince McMahon. Despite confusion over whether such a thing is possible, the S&amp;P slides 4 percent.



Day 3 – Two ratings agencies say they are downgrading a basket of BBB-rated bonds to junk status, expressing concern that a slowing economy will push up defaults. Spreads on high-yield bonds widen dramatically. Market-makers stop trading some exchange-traded funds exposed to corporate debt, and collateralized loan obligations, which buy and repackage junk-rated loans, start offloading assets. The S&amp;P slips 3 percent.



Day 4 – Trump announces the formation of “Team America,” a group of U.S. plutocrats who pledge to invest their personal wealth in the U.S. stock market, including the chief executive of one of Wall Street’s biggest lenders and Treasury Secretary Steven Mnuchin. Within hours, Tesla chief Elon Musk, who had been named as one of the group, tweets that he is looking forward to taking America private “at 420.” Stocks dive a further 5 percent.



Day 5 – Warren Buffett, whose name did not appear on the Team America line-up, tells a CNBC interviewer that he sees no buying opportunities at current levels, and is minded to use his $100 billion cash pile buying back shares instead. Retail investors take fright. Stocks slump 3 percent. Facebook’s valuation has now fallen from $390 billion at the start of the year to just $200 billion.



Day 6 – Over the weekend, Chinese President Xi Jinping expresses concern that, as the holder of $1.2 trillion of U.S. debt, China’s feelings have been hurt by U.S. volatility. Starbucks branches immediately attract protests in second-tier Chinese cities, and rumors proliferate that the People’s Bank of China is preparing to sell Treasuries. Yields on 10-year debt hit 4 percent. The S&amp;P has now fallen 20 percent in a week.



Day 7 – Talks over the acquisition of a large media company fall apart. The buyer blames uncertain markets, but reports emerge that the company’s bankers got cold feet, and withdrew a letter they had provided declaring themselves “highly confident” of arranging financing. Shares in dozens of putative takeover targets fall as much as 30 percent. Trump tells Fox News that Securities and Exchange Commission Chairman Jay Clayton could be doing more to help.



Day 8 – An open letter from Wall Street bank chief executives appears in the financial press, arguing that post-crisis banking reforms have made the meltdown worse. They argue that proprietary trading, which could have enabled banks to buy up stocks on their own account, would have stemmed losses, and call for a reconsideration of Basel 3 and Dodd-Frank Act rules. Financial stocks rise, but the S&amp;P still ends the day down 2 percent.



Day 9 – Mnuchin announces he is standing down from the Treasury, but pledges his full support for the president. Trump says he will pick a replacement quickly, and declines to shut down reports that he is considering rapper Kanye West for the role. Stories emerge that the original selloff may have been triggered by hedge funds who had set up algorithms to trade automatically based on Trump’s tweets. Markets are flat.



Fed expected to hike interest rates, defying Trump



Day 10 – Facebook says Buffett is investing $10 billion as a vote of confidence, taking voting shares and generously priced warrants. The slide in stocks has stopped, as abruptly as it began. The market closes up slightly but has lost almost a quarter in two weeks. Congress begins to discuss curbs on algorithm-based trading. After markets close, the White House announces its new pick for the Treasury: first daughter Ivanka Trump. -Reuters



-John Foley and Neil Unmack

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The 2019 stock market reversal: how it happened

Forgive me for sounding like a crank, but it&#8217;s okay to totally ignore the Bitcoin rally.
Sure Bitcoin&#8217;s up over 1,400% this year (that&#8217;s as of the time I started typing) and its market capitalization now significantly exceeds that of <a href="https://www.forbes.com/companies/procter-gamble/" target="_blank" rel="noopener">Procter &amp; Gamble</a>, the best performing stock in <a href="https://www.forbes.com/sites/antoinegara/2017/09/19/boom-bust-bankruptcy-how-americas-biggest-companies-performed-in-forbes-first-100-years/#5a247baa612a" target="_blank" rel="noopener noreferrer">Forbes&#8217; first 100 years of existence</a>. Despite Bitcoin&#8217;s boom, the digital currency just doesn&#8217;t seem to have any impact on the important financial issues of the day, whether that&#8217;s saving, borrowing, or conducting everyday transactions.
If Bitcoin doesn&#8217;t influence how you save, how you borrow, or how you transact, then maybe there&#8217;s no point paying attention to its staggering rise in 2017. Now might be a good time to push against fears of missing out (FOMO) on the rally, with good reason.
Does Bitcoin really impact your portfolio or your financial plans? When it comes to retirement there are two major, trillion-dollar themes for savers. Nearly a decade after the financial crisis, Americans are returning to the stock market in droves, having been generally underinvested since the 2008 carnage and the market&#8217;s bottoming a year later. As people return to the market, they&#8217;re doing so using low-cost index mutual funds or exchange-traded funds, instead of high-priced managers. Broadly speaking, this a big positive.
After all, the stock market&#8217;s 10%-plus annualized total return over the past 100-years, and a less impressive 7% annual return since December 1997, is the growing bedrock of America&#8217;s retirement system. Big-data tools now show savers how they can plan their finances to meet retirement and other financial goals with a few mouse clicks. Innovations like target-date funds and <a href="http://www.forbes.com/etfs/" target="_blank" rel="noopener">ETFs</a> are creating new levels of precision when building these plans. All the while, fees are falling fast and Wall Street&#8217;s take is mired a steep decline. These trends are being driven by the BlackRocks, Vanguards and Fidelitys of the world, in addition to robo advisors such as Betterment and Wealthfront.
To all of this, Bitcoin is utterly non existent: It has no influence on stock market returns, it isn&#8217;t part of the fee-disruption equation, 401k plans tracking the S&amp;P 500 are doing just fine this year despite missing on &#8220;crypto&#8221;.
There&#8217;s talk of a stock market bubble with each new record high, but some of the fastest-rising companies on the S&amp;P 500, from <a href="https://www.forbes.com/companies/apple/" target="_blank" rel="noopener">Apple</a> to <a href="https://www.forbes.com/companies/facebook/" target="_blank" rel="noopener">Facebook</a> and Amazon, are luring the most careful investors like <a href="http://www.forbes.com/profile/warren-buffett/" target="_blank" rel="noopener">Warren Buffett</a> to Glen Kacher (<a href="https://www.forbes.com/sites/nathanvardi/2017/11/21/the-tiger-of-silicon-valley-glen-kachers-sizzling-hedge-fund/" target="_blank" rel="noopener noreferrer">read our exclusive profile</a>) and <a href="http://www.forbes.com/profile/stanley-druckenmiller/" target="_blank" rel="noopener">Stanley Druckenmiller</a> due to their fundamentals. We&#8217;ll hear from time-to-time about some <a href="https://www.forbes.com/sites/nathanvardi/2017/11/27/cryptocurrency-hedge-fund-fired-rogue-trader-amid-claims-of-incompetence/#7d651d693a82" target="_blank" rel="noopener noreferrer">hedge fund guy buying Bitcoin</a>, and I&#8217;ve even written <a href="https://www.forbes.com/sites/antoinegara/2017/07/18/the-unreformed-stock-picker-without-a-boss-bill-miller-is-betting-on-amazon-bitcoin-and-bob-dylan/#7646ff3549f8" target="_blank" rel="noopener noreferrer">a story or two about the newest</a> Bitcoin bull, but generally the smart money remains in non-crypto assets.
The S&amp;P 500 trades at a price of 25-times earnings and it carries a dividend yield of about 2%; it&#8217;s not cheap by historical standards but anyone who entered the market in the early 1960s at a similarly expensive valuation and stuck with their plans through good and bad times would likely be enjoying a bountiful retirement. At Forbes&#8217; 100th birthday party, <a href="https://www.forbes.com/sites/antoinegara/2017/09/20/dow-1000000-thats-warren-buffetts-latest-call/" target="_blank" rel="noopener noreferrer">Buffett predicted the Dow will exceed $1,000,000 by the time we turn 200</a>, and that&#8217;s possibly the safest prediction he&#8217;s ever offered.
<a href="http://www.forbesafrica.com/cover-story/2017/09/04/bitcoin-blockchain-billions/" target="_blank" rel="noopener">READ MORE: Bitcoin, Blockchain And Billions</a>
The same theme emerges in the big-short and long-term financial moves people have to make in their lives, for instance borrowing to buy a home, finance an education, or in making slightly smaller auto and big-ticket consumer purchases.
These can be major decisions and the current landscape is marked by plenty of &#8220;disruption&#8221;. Virtually all of it is coming from fintech startups, not cryptocurrencies and their attendant networks. Digital-first companies are becoming mainstays in America&#8217;s largest lending markets; competition is increasing, risk assessments are improving, transparency and seamlessness is rising, consumer costs are broadly plunging.
After all, it&#8217;s a new crop of companies like  <a href="https://www.forbes.com/companies/quicken-loans/" target="_blank" rel="noopener">Quicken Loans</a>, SoFi, GreenSky, Credit Karma, LendingClub that are transforming the way everything from a home loan to a college education or pile of credit card debt is handled. Improving credit access is still one of the big non partisan topics of discussion in America and waves of novel solutions are emerging. Entire financing markets, from clean software interfaces originating loans all the way to new securitization markets to distribute debt to institutional investors have emerged in recent years. Bitcoin is nowhere to be found.
Even in payments and other basic transactions, there&#8217;s a growing menu of digital-first options that casts into question whether cryptocurrencies and their associated networks are actually that relevant.
When it comes to electronic payments, it is still <a href="https://www.forbes.com/companies/visa/" target="_blank" rel="noopener">Visa</a> and MasterCard who are winning on a dollar basis. Payment volumes at Visa increased 41% in 2017 to $7.3 trillion, at MasterCard volumes rose 10% to $1.4 trillion last quarter. Cryptocurrencies seek to disrupt these networks, offering no-cost transactions, but the day-to-day flow of money seems to be falling to the incumbents and it is disrupting the use of cash.
<a href="http://www.forbesafrica.com/focus/2017/10/26/will-battle-soul-bitcoin-destroy/" target="_blank" rel="noopener">READ MORE: Will This Battle For The Soul Of Bitcoin Destroy It?</a>
Meanwhile, the market isn&#8217;t static. PayPal&#8217;s Venmo has made person-to-person payments cost free and utterly seamless, like a social network of money. Small businesses are gaining new options; <a href="https://www.forbes.com/companies/square/" target="_blank" rel="noopener">Square</a> recently reported a 31% quarterly increase in payment volumes as it offers merchant sellers access to better and lower cost transaction networks. The world&#8217;s most valuable private financial technology company is <a href="https://www.forbes.com/companies/stripe/" target="_blank" rel="noopener">Stripe</a> , another distruptor in e-commerce and payments.
Behind all of this, it must be said, is the rule of law.
If you get screwed you may have your day in court. Some entities are bound by investor protections and fiduciary standards. Depending on what&#8217;s being done, there&#8217;s also careful assessments of credit risk, identity, and the like. Yes these entrenched systems are the establishment, but that&#8217;s a major advantage.
Of course, cryptocurrencies like Bitcoin and their associated networks promise to disrupt it all. It is presented as potentially a new way to raise capital (goodbye Goldman bankers), a new peer-to-peer sharing tool for everything from data to real estate deals, a cheap alternative to transactions (sorry, greedy MasterCard), and even a novel take on the concept of currency itself. Some view Bitcoin as a store of value like gold, or a slightly damaged and possibly fake Leonardo Da Vinci painting. Others view it as part a sort of new world order liberated from tax authorities, governments, and money-printing central banks. Maybe it is the 2017 fear and volatility trade since the Cboe VIX index remains in single digits despite a profusion of global risk?
Everyday, price graphs that resemble the textbook definition of every bubble ever in history are bandied about as evidence of Bitcoin&#8217;s validity. Judging by the relentless and inexplicable gains, there are likely new converts to Bitcoin by the minute, or hour. The price rise may also cause skeptics to dig their heels further, increasing their bubble talk.
There&#8217;s another, possibly better option: You can simply stick to your plans and ignore Bitcoin. &#8211; Written by <a href="https://www.forbes.com/sites/antoinegara/" target="_blank" rel="noopener" data-ga-track="contrib block byline">Antoine Gara</a>, FORBES STAFF

Tag: stock market

FORBES AFRICA SOCIAL MEDIA

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The Billionaire Interview That Tanked The Stock Market

The 2019 stock market reversal: how it happened

It’s Actually Okay To Completely Ignore Bitcoin’s 1,400% Rally