Over a decade ago, there was no such phrase as 'big tech'.
Rather like the age-old buzzword 'big pharma', the relatively new Trans-Atlantic phraseology that is used to describe internet giants such as Amazon, Facebook and Google as well as dominant operating system forces such as Apple and Microsoft is now an almost institutionalized term.
Big tech, rather like big pharma, is not so much a term used to define the size or quality of the set of companies to which it refers, but more its global presence, and perhaps more specifically, its evergreen share price.
During the past year, both big pharma and big tech have been two of the only benefactors from the draconian lockdowns that have been imposed by Western governments whose policies have decimated many traditional and long established businesses perhaps forever, whilst the handful of too-big-to-fail internet and pharmaceutical giants waded in and have changed the entire commercial landscape, whilst making vast profits in doing so.
Thus, the financial markets have been absolutely reflective of this dynamic, with investor behavior having bolsltered the stock of large technology companies - particularly those of Silicon Valley - to the extent that the NASDAQ, a trading venue which lists a vast amount of technology stock, New York Stock Exchange and the London Stock Exchange's FTSE 100 indices have been climbing in such stable form that they would appear almost risk-free.
It is rather unusual to witness fickle behavior relating to technology stock. It is one of those evergreen phenomena. Allcomers, from city analysts to the retail traders are aware of the relatively low risk nature of holding onto tech stock, however we do not live in usual circumstances and have not done for over a year.
Suddenly, yesterday, investor sentiment turned against tech stock, resulting in a downturn in the NASDAQ which made its way across the Atlantic to London, reducing the value of the entire FTSE 100 index, a set of prestigious listed stocks that had been flying high above 7000 points for several weeks without any sign of slowing.
Suddenly yesterday it went down by 200 points as a tech stock sell off began in New York. At the time, it was considered that the inflation figures, set to be announced in the United States today, were the catalyst, however today, the sell-off continues and the Dow Jones index has taken a massive nosedive, with 600 points having been wiped off overnight.
The Dow Jones industrials sank 1.8%, the S&P 500 shed 1.4% and the Nasdaq lost 0.8%, whilst small cap investments following the Russell 2000 went down by 1%.
It is cleaer that a sell-off is taking place, because the value of these stocks is declining yet there was more trading volume yesterday on the NASDAQ yesterday than the day before, demonstrating that much of that increased trading activity was the result of the relinquishment of stock.
Last year, tech stocks boosted the Nasdaq to a 43.6% gain, resulting in 2020 being the fifth best year since the NASDAQ was established.
Rather interestingly, as the previously completely linear performance by tech stocks and the prestigious exchanges in New York and London suddenly gets curtailed by fickle behavior, the equity markets are booming.
According to research institute CFRA, retail investors put more money into ETFs (exchange traded funds) in the first three months of 2021 than across the entire year 2020.
During the first four months of 2021, there were inflows of $269bn into US-listed equity ETFs which comprise of various asset classes including equities, bonds and commodities excluding gold.
It certainly appears as though the high-tech investor confidence has waned, and that many investors are using electronic trading platforms to trade very analog asset classes such as good old fashioned oil, itself quite volatile in value over the past few months.