Indices Archives - Taking Stock

June 13, 2024June 13, 2024

Nasdaq and S&P 500 hit new all-time highs as Fed feeds scraps to the AI frenzy!

The S&P 500 soared to a new high, surpassing 5400 for the first time on Wednesday 12 June 2024, following the Federal Reserve’s latest policy statement and the May 2024 inflation report, which suggested a softening of inflationary pressures.

The S&P 500 index rose by 0.85%, closing at around 5421 while the Nasdaq Composite advanced 1.53%, finishing at 17608.

Both the S&P 500 and Nasdaq reached unprecedented levels and set closing records on Wednesday 12th June 2024. Conversely, the Dow Jones Industrial Average marginally declined by 0.09%, or around 35 points, to settle at 38712.

S&P 500 at new all-time high 12th June 2024

Nasdaq Composite at new all-time high 12th June 2024

The Federal Reserve maintained the interest rates, aligning with widespread expectations. The Fed also acknowledged some progress on inflation. Modest further progress has been made toward the Committee’s 2% inflation goal and this was more than enough coupled with the recent jobs report to push U.S. markets even higher.

A tiny glimpse of the ‘2% inflation future’ was all it took to send markets on an AI led feeding frenzy to push the S&P 500 and Nasdaq to new all-time highs.

One caveat though, the Fed’s recent forecasts predict only one rate reduction this year, a decrease from the three rate cuts anticipated earlier in 2024.

It was enough to propel markets to fresh all-time highs!

February 9, 2024February 9, 2024

All hail the rally?

U.S. stocks have had a good year in 2023, and a great start to 2024 with new record highs being set.

Many major indices have recorded double-digit gains. However, some analysts have warned that the rally may not last, as it has been driven by a few large-cap technology and growth stocks, while many other sectors and regions have lagged behind.

A stock market rally is a broad and rapid rise in share prices, often defined as a 20% increase from a recent low.

This could indicate a lack of breadth and sustainability in the rally, and potentially signal a market pullback, correction or even a crash in the future.

Bull bear, bull?

Chartists with their technical analysis might see a pattern that points to a substantial upside, but they should not get too carried away with their own observations, right now would be a sensible time for markets to find level ground, if only temporarily.

The bullish view is that the ‘laggards’ should catch up the ‘mega cap’ stalwarts once again. The bearish view is that the ‘mega cap’ stocks’ will realise they’ve gone too far and need to ride back to the rest of the market. Too few stocks in the same sector hold the balance of power – go check out the Magnificent 7 or even the old FANG stocks.

Catch-up

Either way, there ought to be an opportunity for underrepresented sectors and industries to gain lost ground.

The question is, will there be a pause to allow laggards to catch-up, or will the mega caps simply continue on their march?

December 19, 2023December 19, 2023

Nasdaq hits new all-time intra-day high!

The Nasdaq Composite index reached a new all-time intra-day of 16,764 points on Monday 18th December 2023.

This was a remarkable achievement for the index, as it surpassed its previous record of 16,729 points. The Nasdaq Composite index has been on a strong uptrend since March 2020, when it bottomed out at 3,193 points amid the COVID-19 pandemic.

Nasdaq 100 index chart -18th December 2023

Since then, the index has recovered thanks to the rapid development and adoption of vaccines, economic stimulus measures, digital transformation trends, consumer demand for online services and products and through the arrival of AI.

The Nasdaq is one of the most popular and widely followed indexes in the world, as it tracks the performance of over 3,000 companies listed on the Nasdaq stock exchange.

The Nasdaq is known for its high concentration of technology and innovation stocks, such as Apple, Microsoft, Amazon, Google, Facebook, Tesla, and many others.

October 4, 2023October 4, 2023

U.S. stock market volatility continues

The stock market has been experiencing some volatility and uncertainty in September and October 2023, as investors fret about inflation, interest rates, and the possibility of a U.S. recession.

Main facts affecting the current stock market

The month of October has produced some severe stock market crashes over the past century, such as the Bank Panic of 1907, the Wall Street Crash of 1929, and Black Monday 1987.

October has also marked the start of several major long-term stock market rallies, such as Black Monday itself and the 2002 nadir of the Nasdaq-100 after the bursting of the dot-com bubble.

The S&P 500 dropped 4.5% in September 2023 and finished the third quarter in the red.

The U.S. Treasury yield curve has been inverted for months – which is a historically strong recession indicator.

The Fed maintained interest rates at the current target range of between 5.25% and 5.5% in September 2023, but signalled that it may need to raise rates again to combat inflation.

The consumer price index gained 3.7% year-over-year in August 2023, down from peak inflation levels of 9.1% in June 2022 but still well above the Fed’s 2% long-term target.

The bond market is currently pricing in an 81.7% chance the Fed will choose not to raise rates again on 1st November 2023.

Wall Street closed down on 3rd October 2023 as the yield on the U.S. 10-year treasury rose to 4.80%, reaching its highest level since 2007.

The Dow Jones Industrial Average was down at 33002, Tuesday 3rd October 2023.

Stocks fell as investors pulled money from equities and moved it to the hot bond market.

International markets also faced significant turmoil, sending mini shockwaves through global financial centres, which reverberated in equities.

The dollar rose to the highest since December and is heading towards the twelfth positive week in a row.

Uncertainty

Uncertainty in the U.S. political system is having a major affect too. Especially with the ousting of the speaker and the real fear of a government shutdown looming large.