Is this the big give-up? Is this the rebellion that demands that all stocks be graded on price-to-earnings multiples and the high-growth stocks are failing the test?
I am talking about the incredible compression in FANG -- Action Alerts PLUS holding Facebook (FB), Growth Seeker name Amazon.com (AMZN), Netflix (NFLX) and Alphabet (GOOGL) -- plus anything cloud, big data, analytics, all the themes that have defined high growth.
Now, these stocks, with the exception of Facebook and Alphabet, have been falling seemingly forever. Most are well off their highs.
But when you look at a stock like LinkedIn (LNKD) or Tableau Software (DATA), all you see are companies with slowing metrics that were judged on quickening metrics and not much else. They never were graded like Honeywell (HON) or 3M (MMM) or General Mills (GIS) or Kellogg's (K) either.
So now, with their momentum loosened from their moorings, the scramble is on to find a way to justify owning them.
Right now, there isn't, especially when I hear that LinkedIn blames the macro when we thought there was little economic sensitivity and when we see the massive licensing slowdown at Tableau -- it calls into question any company that makes its money analyzing data.
For example, I spoke to Adobe (ADBE) this week, and the company has a phenomenal way of helping any enterprise analyze its own data and make sense of it. It does many things with salesforce.com (CRM) and there is a major scramble to figure out who is going to win in terms of harnessing data. I think the salesforce.com coalition is winning, but you aren't going to get Tableau to say that.
LinkedIn? De-linked from the financial moorings, too. We can't figure out what the heck happened. "People are spooked," as my friend Kara Swisher just said. And there is nothing to un-spook them.
In another words, the tech world is in total disarray. Slowing cellphone growth, declining personal computers, perhaps slowing customer growth, so there is a dogfight for those clients who need data mining; all of these are at the heart of what tech does.
And that heart has been cut out from the stock market. In these situations, you have to wait until we find out if Tableau is simply making excuses and it is losing sales to others, or is the world slowing for mobile, social, cloud and connectivity and everything connected. If that's the case, there's really nothing to do but sell these stocks until we know otherwise.
And that is exactly what is happening.
Oh, one more thing: we don't even know what the Fed is going to do, but we know the economy isn't slowing enough, based on the employment numbers, so there's no refuge in what used to have secular growth, because these don't have enough to override the declining momentum.