Shares of the “Magnificent Seven” group of big technology companies have performed poorly so far in 2024, but investors in their bonds appear unfazed.
Bonds owed to the six companies in the group that issued them – Tesla Inc. TSLA,
It has issued convertible bonds in the past, but converted into shares – and has seen net buying over the past three days, while spreads have widened slightly.
The following chart from data solutions company BondCliQ Media Services shows flows over the past three days, with Amazon.com Inc. AMZN,
Apple Inc. AAPL,
Microsoft Corporation (MSFT),
See the bulk of the work. The remaining members of the group are Nvidia Corp. NVDA,
Google's parent company Alphabet Inc.GOOGL,
and Meta Platforms Inc.META,
Bond Click Media Services
The following chart shows how purchases are broken down by customer type:
Bond Click Media Services
Spreads on Treasuries were slightly wider during this period, but that did not deter buyers. The 10-year Treasury yield has risen back above 4%, but these quality names still look attractive for the yield they offer.
Bond Click Media Services
Meanwhile, stocks started the year on a downward note, led by Apple, which is down 5.5% year to date following downgrades from Barclays and Pepper Sandler.
Piper analyst Harsh Kumar downgraded the stock to neutral from overweight on Thursday, citing concerns about valuation as well as pressures in the smartphone market.
Kumar said he was concerned about phone inventories during the first half of the year, while he expected unit sales growth rates to peak. This is notable considering that iPhones account for about half of Apple's revenue.
See also: Apple stock needs to “break up” — and its innovation rut may not be helping
The downgrade followed a decision by Barclays analyst Tim Long on Tuesday, although Long moved to a less weighty position from his previous neutral stance.
Amazon shares are down 3.9% so far this year, while Tesla shares are down 3%, Nvidia shares are down 2.6%, and Alphabet shares are down 1.2%. Meta fell by 1.4%.
The Nasdaq Composite Index fell for the fifth straight day, putting it on track for its longest losing streak since Oct. 12, 2022, when it fell for six straight trading days, according to Dow Jones Market Data.
