"AP Top Financial News at 12:13 a.m. EST"

Ladies and gentlemen, buckle up! We're diving headfirst into the financial frenzy of the night. The market is a rollercoaster, and tonight, it's all about the tech giants: Alphabet, Amazon, and Apple. These three titans make up nearly 15% of the S&P 500, and their performance is crucial for the overall market health. Let's break it down!

The Big Three: Alphabet, Amazon, and Apple



These three companies have been the backbone of the stock market's growth over the past decade. Alphabet's stock nearly quintupled, while Amazon and Apple delivered close to 9x gains. But what happens when the market takes a downturn? Let's look at their performance during the last big recession.

The Great Recession: A Wake-Up Call

During the Great Recession, all three stocks plummeted close to 60% below their previous highs. Even after the recession officially ended, none of the stocks had fully recovered. Alphabet, then known as Google, was still down more than 40%. This is a stark reminder that even the biggest names can take a hit during economic turmoil.

The COVID-19 Recession: A Blip or a Trend?

The COVID-19 recession was a different beast. It was the shortest recession in history, lasting only two months. All three stocks plunged at least 20%, with both Alphabet and Apple falling more than 30%. But here's the kicker: they quickly recovered most, if not all, of their losses. This rapid recovery was likely due to the short duration of the recession and the companies' strong fundamentals.

The Apple Paradox: Sales Down, Stock Up

Now, let's talk about the elephant in the room: Apple. Despite declining sales since September 2022, Apple’s stock value has increased by 75%. This is a paradox that has drawn attention from investors worldwide, including legendary investors who have reduced their Apple holdings despite the stock’s 35% gain. The explanation? Passive and index investing. Apple represents 7.6% of the S&P 500, creating a self-reinforcing cycle that supports the stock price.

The Market's Next Move: Recession or Recovery?

Economists and financial experts are warning that a recession could be on the way. If they're right, the overall stock market will likely move in lockstep with Alphabet, Amazon, and Apple. But what should investors expect? Here's how these giants fared in the last big recession:

- Alphabet: Plummeted close to 60% below its previous highs.
- Amazon: Plummeted close to 60% below its previous highs.
- Apple: Plummeted close to 60% below its previous highs.

Strategies for Investors: Navigating the Storm

1. Long-Term Investment: Think long-term. These companies have shown resilience and growth over the years. Even if you bought shares at the peak before the Great Recession hit, you would have still made a boatload of money—if you had held onto those shares.
2. Diversification: Don't put all your eggs in one basket. Diversify your investments across different sectors and asset classes.
3. Index Investing: Given the significant weighting of Alphabet, Amazon, and Apple in major indices, passive index investing can provide exposure to these companies. But be aware of the potential risks, such as amplified selling pressure during market downturns.
4. Monitoring Economic Indicators: Keep an eye on economic indicators such as GDP growth, unemployment rates, and consumer spending. This information can help you make informed decisions about when to buy or sell stocks.
5. Stock Splits and Retail Investor Interest: Alphabet and Amazon have upcoming 20-for-1 stock splits, which could attract more retail investors by lowering the share price. This increased interest could support stock prices, even during a recession.

The Bottom Line: Stay Informed, Stay Agile

The current economic climate poses challenges for Alphabet, Amazon, and Apple, but historical data and long-term growth prospects suggest that these companies are well-positioned to weather the storm. Investors can navigate these challenges by adopting a long-term investment strategy, diversifying their portfolios, and staying informed about economic indicators. Additionally, the upcoming stock splits for Alphabet and Amazon could provide a boost to their stock prices, further supporting investor confidence.

So, are you ready to ride the rollercoaster? The market is a wild ride, but with the right strategy, you can come out on top. Stay informed, stay agile, and most importantly, stay invested!