Markets
Charts: Visualizing the Bear Market in FAANG Stocks
Visualizing the Bear Market in FAANG Stocks
The Chart of the Week is a weekly Visual Capitalist feature on Fridays.
What goes up, must come down.
Over recent years, there hasn’t been a safer bet than big tech – specifically the FAANG stocks, which include Facebook, Apple, Amazon, Netflix, and Google’s parent company Alphabet.
But in the financial world, this feeling of euphoria can be turned upside-down very quickly.
Since the summer, the five tech giants combined have lost close to $1 trillion in market capitalization from their peaks. Now the FAANG stocks have officially slipped into a bear market, with investors blaming rising interest rates, slumping sales forecasts, possible government intervention, and bubble-like valuations as reasons for the reversal in fortune.
The Damage Done
The generally accepted definition of a bear market is a 20% or greater decline from recent market highs.
Facebook and Netflix have been in bear territory for months, but the remaining members of FAANG only just recently capitulated. Apple was the last to go – but with -24% in lost value since its peak on October 3, it is now in trouble as well.
Company | Peak valuation ($B) | Current valuation ($B) | Difference ($B) |
---|---|---|---|
Apple | $1,103 | $839 | $264 |
Amazon | $982 | $750 | $232 |
$628 | $385 | $243 | |
Alphabet | $894 | $722 | $172 |
Netflix | $182 | $115 | $67 |
Total | $3,789 | $2,811 | $978 |
Data based on publication time on Nov 23, 2018
Interestingly, this is the first time that the FAANG stocks have been in a bear market together, meaning this is uncharted territory for big tech and the wider market as a whole.
After the Gold Rush
While FAANG represents a small fraction of tech stocks available on the market, they do make up a significant percent of indices like the S&P 500 or the Nasdaq Composite. As a result, this slump can impact the rest of the market – and it manifests a more general malaise that other, less-beloved tech stocks must deal with.
Unsurprisingly, the Nasdaq Composite – a technology bellwether – is feeling the pain as well:
The sentiment can also be seen in other tech names, some which have been slumping for awhile and others which have fallen into a funk only recently:
Even SaaS darlings like Salesforce.com can’t shake the trend – the stock entered bear territory itself on November 19th.
Tell Me Why
Why have investors soured, at least temporarily, on the tech stock universe?
There are multiple narratives floating around, but the general gist is something like this: the current bull market in stocks is nine years long, and at some point the party will come to an end. Because the FAANG stocks traditionally trade at very generous valuations, they are likely to come back down to earth as economic conditions deteriorate.
Further, the fears around FAANG stocks are seemingly being confirmed by recent news. For example, there are reports of Apple slicing orders for iPhones, a stagnant Facebook userbase, and other growth hurdles being experienced by these companies – and these reports are helping to fan the flames.
Some experts see the slump as an opportunity to load up on discounted tech heavyweights – while others, such as early Facebook investor Jason Calacanis, say it is possible that the social network has already experienced its “Yahoo peak” in terms of relevance and valuation.
Markets
Which Countries Hold the Most U.S. Debt?
Foreign investors hold $7.3 trillion of the national U.S. debt. These holdings declined 6% in 2022 amid a strong U.S. dollar and rising rates.

Which Countries Hold the Most U.S. Debt in 2022?
Today, America owes foreign investors of its national debt $7.3 trillion.
These are in the form of Treasury securities, some of the most liquid assets worldwide. Central banks use them for foreign exchange reserves and private investors flock to them during flights to safety thanks to their perceived low default risk.
Beyond these reasons, foreign investors may buy Treasuries as a store of value. They are often used as collateral during certain international trade transactions, or countries can use them to help manage exchange rate policy. For example, countries may buy Treasuries to protect their currencyโs exchange rate from speculation.
In the above graphic, we show the foreign holders of the U.S. national debt using data from the U.S. Department of the Treasury.
Top Foreign Holders of U.S. Debt
With $1.1 trillion in Treasury holdings, Japan is the largest foreign holder of U.S. debt.
Japan surpassed China as the top holder in 2019 as China shed over $250 billion, or 30% of its holdings in four years.
This bond offloading by China is the one way the country can manage the yuan’s exchange rate. This is because if it sells dollars, it can buy the yuan when the currency falls. At the same time, China doesnโt solely use the dollar to manage its currencyโit now uses a basket of currencies.
Here are the countries that hold the most U.S. debt:
Rank | Country | U.S. Treasury Holdings | Share of Total |
---|---|---|---|
1 | ๐ฏ๐ต Japan | $1,076B | 14.7% |
2 | ๐จ๐ณ China | $867B | 11.9% |
3 | ๐ฌ๐ง United Kingdom | $655B | 8.9% |
4 | ๐ง๐ช Belgium | $354B | 4.8% |
5 | ๐ฑ๐บ Luxembourg | $329B | 4.5% |
6 | ๐ฐ๐พ Cayman Islands | $284B | 3.9% |
7 | ๐จ๐ญ Switzerland | $270B | 3.7% |
8 | ๐ฎ๐ช Ireland | $255B | 3.5% |
9 | ๐น๐ผ Taiwan | $226B | 3.1% |
10 | ๐ฎ๐ณ India | $224B | 3.1% |
11 | ๐ญ๐ฐ Hong Kong | $221B | 3.0% |
12 | ๐ง๐ท Brazil | $217B | 3.0% |
13 | ๐จ๐ฆ Canada | $215B | 2.9% |
14 | ๐ซ๐ท France | $189B | 2.6% |
15 | ๐ธ๐ฌ Singapore | $179B | 2.4% |
16 | ๐ธ๐ฆ Saudi Arabia | $120B | 1.6% |
17 | ๐ฐ๐ท South Korea | $103B | 1.4% |
18 | ๐ฉ๐ช Germany | $101B | 1.4% |
19 | ๐ณ๐ด Norway | $92B | 1.3% |
20 | ๐ง๐ฒ Bermuda | $82B | 1.1% |
21 | ๐ณ๐ฑ Netherlands | $67B | 0.9% |
22 | ๐ฒ๐ฝ Mexico | $59B | 0.8% |
23 | ๐ฆ๐ช UAE | $59B | 0.8% |
24 | ๐ฆ๐บ Australia | $57B | 0.8% |
25 | ๐ฐ๐ผ Kuwait | $49B | 0.7% |
26 | ๐ต๐ญ Philippines | $48B | 0.7% |
27 | ๐ฎ๐ฑ Israel | $48B | 0.7% |
28 | ๐ง๐ธ Bahamas | $46B | 0.6% |
29 | ๐น๐ญ Thailand | $46B | 0.6% |
30 | ๐ธ๐ช Sweden | $42B | 0.6% |
31 | ๐ฎ๐ถ Iraq | $41B | 0.6% |
32 | ๐จ๐ด Colombia | $40B | 0.5% |
33 | ๐ฎ๐น Italy | $39B | 0.5% |
34 | ๐ต๐ฑ Poland | $38B | 0.5% |
35 | ๐ช๐ธ Spain | $37B | 0.5% |
36 | ๐ป๐ณ Vietnam | $37B | 0.5% |
37 | ๐จ๐ฑ Chile | $34B | 0.5% |
38 | ๐ต๐ช Peru | $32B | 0.4% |
All Other | $439B | 6.0% |
As the above table shows, the United Kingdom is the third highest holder, at over $655 billion in Treasuries. Across Europe, 13 countries are notable holders of these securities, the highest in any region, followed by Asia-Pacific at 11 different holders.
A handful of small nations own a surprising amount of U.S. debt. With a population of 70,000, the Cayman Islands own a towering amount of Treasury bonds to the tune of $284 billion. There are more hedge funds domiciled in the Cayman Islands per capita than any other nation worldwide.
In fact, the four smallest nations in the visualization aboveโCayman Islands, Bermuda, Bahamas, and Luxembourgโhave a combined population of just 1.2 million people, but own a staggering $741 billion in Treasuries.
Interest Rates and Treasury Market Dynamics
Over 2022, foreign demand for Treasuries sank 6% as higher interest rates and a strong U.S. dollar made owning these bonds less profitable.
This is because rising interest rates on U.S. debt makes the present value of their future income payments lower. Meanwhile, their prices also fall.
As the chart below shows, this drop in demand is a sharp reversal from 2018-2020, when demand jumped as interest rates hovered at historic lows. A similar trend took place in the decade after the 2008-09 financial crisis when U.S. debt holdings effectively tripled from $2 to $6 trillion.
Driving this trend was Chinaโs rapid purchase of Treasuries, which ballooned from $100 billion in 2002 to a peak of $1.3 trillion in 2013. As the countryโs exports and output expanded, it sold yuan and bought dollars to help alleviate exchange rate pressure on its currency.
Fast-forward to today, and global interest-rate uncertaintyโwhich in turn can impact national currency valuations and therefore demand for Treasuriesโcontinues to be a factor impacting the future direction of foreign U.S. debt holdings.
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