Nasdaq 100 Index
- By date
- Metadoro first
Nasdaq 100 (USTech100) peaked at nearly 18,900 while S&P 500 (US500) futures contracts retraced to 5,200 only recently, through late May. Brushing up on my overview of the Wall Street sentiment at that moment, I saw an initial target price in the direct vicinity of 20,000 points for the tech-heavy Nasdaq, also considering 5,500 points as the next reasonable target for the broad market index. Now both milestones are almost reached, as today's intraday climbing stopped at only 11.2 points and 16.4 points from their round top figures. It's high time to take profit (this option is better suited for short-term speculators), or to set new goals (for mid-term investors like me). I would define and restrict my realistic dreams by 5,700 for US500 and 22,500 for USTech100, respectively.
It doesn't have to be a dramatic breakthrough above 20,000, but would rather resemble water dripping through the soil and rocks. Yet, I feel this is only a matter of time and a short wait during the three summer months, maybe September too. Easing inflation pressure in the form of U.S. consumer prices reading at 0.0% from 0.3% in monthly indications and 3.3% YoY (from 3.4% in April) probably mattered more to the market conditions than the Federal Reserve's projections with one single interest rate cut before the end of 2024. Both news were released last Wednesday, on June 12, ultimately composing a winning combination for Wall Street bulls.
Perhaps the market believes that central bankers are simply too shy to declare their real intentions in advance but they will be ready for changing a more-hawkish-than-dovish stance in autumn. Another opportunity is that the markets didn't have a care in what the Fed actually says, as most Lilliput private investors in the crowd led by institutional Gullivers are too anxious to get rid of cash by transforming it into AI-related growth assets.
After a 10-for-1 NVIDIA stock split, the global chip leader's value rose by another 10% to above $133 (formerly $1330) per share. Other AI favourites of mine are trying to match the tone, with Broadcom (AVGO) just skyrocketing above $1800 this month, Dell jumping by nearly 7.5% in one trading session, Micron Technology (MU) also gaining more than 6% today (and soaring more than 25% since the beginning of June), and Qualcomm adding nearly 11% only for the last ten days. I mentioned all the three companies several times in my posts, which would be enough for the topic. Meanwhile, a collaboration between Microsoft's Azure and Oracle on cloud platforms and data centre development is the other pole forming the point of application of force for the investing crowds. Both giants are refreshing their all-time highs to help this market earth revolving in the same, and prevailingly bullish, direction.
Nasdaq 100 Index
Being a pure tech index, it has some unique features:
- The NASDAQ index is heavily affected by market capitalisation of the companies, which have its stocks inside the index. Thus, corporates like Apple, Amazon, Facebook, Intel, Microsoft, NVidia, Tesla, and other tech giants’ stocks have a strong impact on index movements. Tech sector stocks are responsible for 50% of the market cap of the index, for 20% of the consumer sector and 10% of healthcare;
- The index is currently outrunning the S&P 500 index as it has risen by 80% above the latter over the last decade;
- The NASDAQ index is affected by the economic situation and data, including U.S. GDP, wages, investments, and retail sales. The Federal Reserve’s (Fed) decisions have a significant impact on the index. Lower interest rates and easing monetary policy by the Fed have a positive effect on the index. All these developments should be monitored while investing in this asset;
- The Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) indexes have a significant impact on the index. When inflation is far above the target at 2%, its increase is negative for the index, as it contributes to the monetary tightening by the Fed. Weak inflation below the target supports the index;
- The NASDAQ index is a risky asset, and is affected by risk appetite. But it has no major influence on the risk appetite itself as it is a sectoral index measuring the performance of tech stocks. The performance of the S&P 500 index and the CBOE Volatility index (VIX) should be monitored to understand risk appetite changes;
- Artificial Intelligence, and other specific tech stories exclusively affect the index. Bottlenecks in logistics and trade wars in high tech segments push the index down much stronger than the stock market in general;
- The index could be traded via CFD’s, futures, or designated ETF’s.
Ticker | USTech100 |
Contract value | 10 10 USD x USTech100 Index |
Maximum leverage | 1:100 |
Date | Short Swap (%) | Long Swap (%) | No data |
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Minimum transaction volume | 0.01 lot |
Maximum transaction volume | 100 lots |
Hedging margin | 50% |
USD Exposure | Max Leverage Applied | Floating Margin |
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