As I discussed in my opening post, the market's primary theme recently has been inconsistent and choppiness. There was broad weakness on Monday, but the indices held up relatively well. Then there was broad strength on Tuesday, but the indices were mixed. And so far on Wednesday, we have the DJIA and S&P 500 in the green, but breadth is running negative -- 2,600 gainers to 3,700 decliners -- and small-caps are lagging.
This inconsistency is making trading quite challenging, as it isn't possible to count on any follow-through. A few names on my radar -- such as China plays iQIYI (IQ) and Bilibili (BILI) -- are showing some signs of life, but it's a mixed bag overall. Groups like oil and biotechnology are weak, while the FAANG names are all in the red.
Speaking of the FAANGs, Alphabet (GOOG) , (GOOGL) is trading lower as I write this, but investors seem unconcerned about Wednesday's whopping $5 billion European Union fine against the company. The EU sanctioned GOOGL for manipulating Android mobile devices to give the Google search engine an advantage over rivals.
However, this move wasn't unexpected, and GOOGL is still hovering around all-time highs. In fact, that only reason the stock is down at all is probably overall FAANG weakness.
To me, the most significant impact of the EU fine is that it raises fresh concerns about continued government pressure on social-media companies, especially in Europe. At some point, this might matter to social-media and Internet giants, although that doesn't appear to be happening yet.
A $5 billion fine is hardly causing a ripple in the Alphabet trading, while Facebook (FB) has been hitting new highs despite intense scrutiny of its privacy practices. These developments might make for good headlines, but the market is unconcerned so far.