Thus far, 2016 has not been a good year for stocks. A combination of rock-bottom oil prices, interest rates finally rising, and a long-anticipated market correction that had stocks already flagging in the second half of 2015 all seemed to reach a fever pitch. After Monday’s down day, the S&P 500 is off 9.3% on the year even after losing 2.15% for 2015.
This major downswing has meant that a lot of well-known companies have taken a serious hit, sometimes shedding billions of dollars in value in a little over a month. Here’s a look at some of the major names that are down big in 2016, and how much money their shareholders are out.
2016 Performance: -27.78%
Value Lost: $82.77 billion
At the end of the calendar year, Amazon was riding high. The company had just worked its way into the $300 billion club, well on its way to becoming the world’s dominant retailer. Well, apparently a lot of people felt like $300 billion was a little bit too high. The company’s valuation had soared so high in 2015 that it’s likely unsurprising that this was one of the stocks hit hardest by the sell-off. This likely shouldn’t be viewed as any sort of real trouble for Amazon, just a hot tech stock undergoing a correction after a huge run-up over the last year.
2016 Performance: -27.16%
Value Lost: $13.6 billion
Ah, another of the members of FANG on the downswing. Like Amazon, there doesn’t seem to be a clear business reason for such a massive loss of value. This one, like Amazon, appears to be mostly market based. Netflix had gained a whopping 135% over the course of 2015 while the rest of the S&P 500 was falling 2.00%. That had pushed the P/E value well over 300, perhaps giving investors pause about just how high the stock should go.
2016 Performance: -31.06%
Value Lost: $15.3 billion
Salesforce is a cloud-computing company that’s trying to take the sales process into a new era of customer relationship management (CRM). The company gained about 30% over 2015, but it’s given almost all of that back so far in 2016. The company continues to show plenty of revenue growth, but the widening losses combined, with the long positive run may have helped investors decide this was one of the first stocks to jettison from their portfolio when markets started going south.
Bank of America (BAC)
2016 Performance: -27.09%
Value Lost: $44.61 billion
Unlike the first three companies listed here, Bank of America shouldn’t be confused with a company experiencing a correction after widespread enthusiasm drove share prices too high. Rather, Bank of America is a stock that has never quite gotten the bounce back from the financial crisis one might have expected, and continues to fail at producing real growth in revenues or profits.
2016 Performance: -26.94%
Value Lost: $38.32 billion
Bank of America’s not alone, though, as the entire financial sector has been feeling the pinch early in 2016. The Financial Select Sector SPDR ETF (XLF) is off 14.31% so far this year, and some of the largest banks have been among the hardest hit in the early going. The slight uptick in interest rates would seemingly be a positive for these big banks, but continued concerns about slowing global growth, rock-bottom oil prices, and the ongoing troubles in Chinese financial markets are all weighing on the big banks.
Citigroup’s Q3 revenue and net income were both lower quarter over quarter, potentially providing the sell signal that culminated in early 2016.
Morgan Stanley (MS)
2016 Performance: -28.73%
Value Lost: $16.6 billion
A look at Morgan Stanley’s earnings may provide a bit more insight into the larger tumble for the financial sector. Like Bank of America and Citigroup, Morgan Stanley’s Q3 in 2015 showed a sharp pullback in revenue and profit. Unlike Bank of America and Citigroup, Morgan Stanley has already released its Q4 earnings, which showed revenue and profit dropping even more. Given the way these large banking entities tend to operate in similar areas and tend to be exposed to a lot of the same economic factors, it’s not a stretch to believe that similar news is forthcoming for other major banks.
All market data was accurate as of market close on February 8, 2016.
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