FXTM information and reviews
IronFX information and reviews
Libertex information and reviews
ETX Capital information and reviews
ETX Capital
Markets.com information and reviews
FxPro information and reviews
47 554.25

Nasdaq 100 doubles in 20 months! More gains to come?

27 August 2020

Over the past three months, we have been hearing much about how quickly the Nasdaq erased its losses during the pandemic and went on to post new record highs. After reaching its year-to-date bottom on March 20th, having nearly wiped out all of its gains in 2019, the Nasdaq 100 has since risen by over 71 percent.

Such has been the stunning surge among tech counters that the Nasdaq 100 has doubled in just 20 months!

Since closing below the 6,000 mark on Christmas Eve 2018, the Nasdaq 100 is now knocking on 12,000’s door following yesterday’s (Wednesday, 26 August) gain of 2.13 percent. On average, this index has climbed 16 percent every year since the dot com bubble (2003 – 2019). So far in 2020, It has already climbed more than 37 percent, which is more than double the annual average for this benchmark which tracks the 100 biggest non-financial companies by market capitalization that are listed on the Nasdaq.

The question that’s now seeping into the mind of investors is whether there’s much more room to climb?

Having witnessed the sector’s outperformance since March, perhaps it would take a very resolute bear to bet against these counters and still hold on to short positions. And that’s despite the Nasdaq 100 being more expensive than other US equity benchmarks. The Nasdaq 100’s P/E ratio is at 38.88 at the time of writing, well below the Nasdaq Composite’s 67.58, but still significantly higher than the S&P 500’s P/E ratio of just over 27 and the Dow’s P/E ratio of 24.

From a fundamental perspective, Big Tech is primed to fare much better than conventional companies amid the pandemic. Even if a vaccine were to be available for mass roll-out in the US over the near term, at a rate of one million inoculations per day, it would still take nearly a whole year to vaccinate the entire US population. With global cases now exceeding 24 million, with a rise in new infections being detected in France, Italy, and South Korea, the pandemic is far from over, which creates a moat of sorts around Big Tech’s leadership in the markets. The sector is further buffered by its strong balance sheets, as well as the accommodative fiscal and monetary policies.

From a technical perspective however, a pullback may be due over the near-term, given that the Nasdaq 100 minis’ 14-day relative strength index (RSI) has surpassed the 76 mark, which is the highest since before the pandemic. An RSI reading above 70 denotes overbought conditions. It could take a 10 percent correction to wipe out the index’s gains so far this month and bring an end to a run of four consecutive months of gains.

Still, if such a scenario were to transpire, perhaps that could present another buying opportunity for afficionados of Big Tech.



Energy is the play: how we get to $100 crude
Energy is the play: how we get to $100 crude

Natural gas futures in Europe and the UK are flying, while our natural gas (NG) CFD (the underlying is traded on the NYMEX) pushed over $5.60 and into 7-year highs...

16 Sep 2021

Are investors sleeping on systematic risk in China?
Are investors sleeping on systematic risk in China?

It’s time to talk about China. The situation is getting dicier as the nation’s second-largest property developer - Evergrande - is on the verge of default. Trading in the company...

16 Sep 2021

Sentiment sours as the S&P 500 tests key support
Sentiment sours as the S&P 500 tests key support

We head to quadruple witching in the US on Friday and notably options expiration (OPEX), and the weakness we see time and again in the week before seems...

15 Sep 2021

Dollar unscathed by soft inflation, equities resume slide
Dollar unscathed by soft inflation, equities resume slide

Dollar takes little damage despite signs US inflation has peaked - Wall Street resumes selloff - all eyes on China contagion risks - Canadian data coming up ahead of elections, gold wakes up...

15 Sep 2021

US inflation under the microscope
US inflation under the microscope

With the Fed having almost locked in a November taper announcement, the question now is whether Chairman Powell will use next week’s policy meeting to give the markets...

14 Sep 2021

Wall Street loses altitude. Dollar grinds higher
Wall Street loses altitude. Dollar grinds higher

The relentless rally in US stock markets took a breather last week. Wall Street suffered a rare pullback as investors took some profits off the table, positioning...

13 Sep 2021

Forex Forecasts

OctaFX information and reviews
HotForex information and reviews
XM information and reviews
FXCM information and reviews
Vantage FX information and reviews
Vantage FX
Moneta Markets information and reviews
Moneta Markets

© 2006-2021 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.