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Big Tech went from growth stocks to Wall Street’s Treasury bond substitute during the coronavirus

FAANG stocks displayed at the Nasdaq.

Adam Jeffery | CNBC

Investors and traders have historically turned to less-risky assets such as U.S. Treasurys to weather market volatility and uncertainty. During the coronavirus pandemic, however, they have turned to unlikely place: tech and software stocks.

Shares of Apple, Netflix, Microsoft, and Amazon are all trading at, or near record highs. All four of these stocks are up at least 29% for 2020 and have contributed to the Nasdaq Composite’s massive outperformance over the S&P 500 this year. The Nasdaq has surged 17% this year while the S&P 500 remains down over 2% in that time period. 

Wall Street flocked into these names because they believe their business models can not only weather this downturn, but thrive in it. This has led major tech and software stocks to seemingly behave like a safe haven Treasury bond, a dynamic that was apparent throughout this week.

“Clearly, the Covid cases going up around the country has gotten people into those software and internet plays,” said Christian Fromhertz, CEO of Tribeca Trade Group. “These stocks are clearly the haves and it will stay that way until something changes.”

The U.S. reported record numbers this week in daily coronavirus increases. On Thursday, more than 63,000 new coronavirus cases were confirmed in the U.S., according to Johns Hopkins University. The country’s seven-day average of cases also jumped to more than 53,000 this week.

At the state level, Florida’s coronavirus-related hospitalizations hit an all-time high. Nevada rolled back a reopening plan for bars in the state. 

This grim data put stocks that would benefit from the economy reopening under pressure this week. Ameri