Are the NASDAQ stocks the best investment going forward into the post-pandemic recovery? Is the NASDAQ forecast that bright, that you’ll ignore the strong performance of the best Dow, S&P 500 and Russell stocks?
The rise of the 2700 stock NASDAQ compendium is one of the top indicators of economic optimism. And tech is the future. There are some conflicting signals for tech stock valuations and the NASDAQ has been volatile of late.
The Dow Jones and the NASDAQ have been divergent of late. When one rises the other falls. That should signal something important to investors, even during a pandemic recovery.
Experts believe the Consumer Price Index is a key indicator for consumer discretionary spending on technology, so they’re waiting for the next CPI report to cast their judgement. But inflation and higher retail prices are not expected to rocket.
Another issue is the supply of microprocessors that are used in virtually electronic equipment from smartphones to automobiles including EVs. That has slowed electronics manufacturing, but once the chips start flowing again, it could give a boost to the NASDAQ. Apples is a key stock in the composite, and Apple is facing some doubts about its foray into electric vehicles. Critics say it could be 5 to 7 years before delivery and may weigh the company down.
With respect to semiconductors, it looks like semiconductor stocks are hot.
Stimulus money will help lift the NASDAQ and the fortunes of New York and California, but post-stimulus, investors wonder what will drive the tech sector from 2022 and beyond.
Finding NASDAQ Best Stocks
You’re optimistic and you’re wondering about the NASDAQ potential and you’re wondering which stocks make the best sense. Even if anti-monopoly threats, Google’s stock price, Tesla’s stock price, Apple’s stock price, Facebook’s stock price, and Amazon’s stock price should hold well. The economy will lift all boats.
NASDAQ has been volatile but as the chart suggests, the tech stocks are on their way back.
Nasdaq record close. Screen capture courtesy of Yahoo Finance
Best Nasdaq Stocks of Late
Looking at the stock market today, big performers on the NASDAQ were NXP Semiconductors, Fox Corp, Micron Tech, and T-mobile. On that note, please review the best 5G stocks to buy, many listed on the NASDAQ.
Yahoo Financ’s best NASDAQ stock picks are:
- Moderna (NASDAQ: MRNA)
- Applied Materials (NASDAQ: AMAT),
- Intel (NASDAQ: INTC)
- Microsoft (NASDAQ: MSFT)
- eBay (NASDAQ: EBAY)
- Nvidia (NASDAQ: NVDA)
- Tesla (NASDAQ: TSLA)
- Lam Research (NASDAQ: LRCX)
- Amazon (NASDAQ: AMZN)
- PayPal (NASDAQ: PYPL)
I’d have to add Google and Facebook, as they own the online advertising sector which will boom as consumers begin to pick up their spending this year and next. NASDAQ themselves advise to watch QuantumScape Corporation (NYSE: QS), CrowdStrike Holdings Inc. (NASDAQ: CRWD), NVIDIA Corporation (NASDAQ: NVDA), Nano-X Imaging Limited (NASDAQ: NNOX) this week.
Here’s Barcharts choice of best Nasdaq stocks to buy:
Best NASDAQ Stocks This Year
Top Tech Stocks with a Strong rating from NASDAQ
Technology Stocks Key to Economic Outlook
Technology makes things more profitable, scalable, and is the key to staying competitive vs the Chinese and Japanese. Technology transfer is one of the top reasons the Asian economies bloomed into trillion-dollar behemoths.
But that transfer is being curtailed to allow American companies to compete better and keep the assets they develop. However, a fair trade deal with Chinese is generally seen as good for NASDAQ stocks.
What is the NASDAQ?
The NASDAQ stock exchange and indexes is a compendium of mostly technology stocks that provide a snapshot of the health of the technology sector in the US. It’s one of the most exciting and dynamic stock markets. The NASDAQ composite is considered the top indicator of US technology health. Not all NASDAQ listed stocks are part of the NASDAQ composite index.
A forecast for the NASDAQ hinges on political views, economic outlooks, and now on national health epidemics. That creates a diverse collection of NASDAQ predictions. The same can be said for DJIA forecasts and S&P forecasts.
Domestic spending, cultural changes, trade wars, commodity prices, wage levels, consumer confidence, and even media news reports and biased journalism can all affect the stock prices and profit outlook for tech stocks. The price of a tech stock on the NASDAQ exchange is a valuation of its future value — a guesstimate of the performance of the company and the dividends it might pay. Sentiment does play a role.
The NASDAQ composite index comprises about 3000 technology stocks. The NASDAQ 100 is a basket of the 100 largest actively traded U.S companies listed on the Nasdaq stock exchange. See our Best Stock Picks for 2020 and stock prices posts.
What is the NASDAQ 30?
The NASDAQ 30 is a small sampling of mega-sized companies and they can distract from other stocks with potential. One such stock is Robinhood which decided to do its IPO via the NASDAQ and not the S&P. See more on this week’s forecast and the 6 month forecast.
If investors are clinging to the tech monopolies Google, Facebook, Apple, Microsoft, and Amazon it could be out of a lack of confidence in the US economy and perhaps the overall stock market. And with the recent stock price volatility caused by even the slightest bad news (interest rate rumors, government bond yields, etc.), we know investors have weak confidence in the the current US administration.
The NASDAQ 100 Forecast
The NASDAQ 100 listed stocks are the prized collection of NASDAQ stocks. They are particularly sensitive to international trade. When imports to the US are curtailed, you can expect these stocks will suffer badly. Those NASDAQ index stocks that cater to US consumers alone will likely do well. The US economy is still doing well. As long as the forecast for interest rates and the mortgage rate forecast continues low, they will gain strength.
This performance chart courtesy of Barchart.com, shows some of the most prized companies in America. Although NASDAQ performance is sluggish of late, it will pick up. This might be the ideal time to research and buy some of the best value stocks in the 100 stock composite.
Trading Economics predicts the NASDAQ is not going to fair well over the next few years.
What Causes NASDAQ Volatility?
Stock market price volatility is a hot topic and not many researchers are able to test their theories about why the NASDAQ seems to be the most volatile. A 2001 study surmised that it is composed of smaller companies than the S&P, and these have less secure income streams, and are more exposed to business deals, investor whims, and bad news. But now, the tech companies are much better capitalized and are some of the largest companies in the world.
The expert also cited the NASDAQ having too many Internet Stocks, yet these Internet stocks are now big, fairly successful companies such as Amazon, Google Alphabet, Tesla, and Facebook. And they’re very stable and profitable. Many of the IPOs of tomorrow’s best companies appear on the NASDAQ. And technology will always be king.
The smart investor might invest in pools of NASDAQ stocks rather than reading financial reports and gambling on individual stocks. The downside risk is high with individual companies. Even Facebook, Tesla, Amazon, and Google face anti-trust investigations that could ruin them, or benefit them even more. That volatility fits perfect with NASDAQ investors. There is money to be made on the ups and downs.
NASDAQ weekly volatility draws investors, who are more like gamblers. Is gambling online illegal? Yes, unless you’re buying and selling NASDAQ stocks. Then it’s okay.
When Volatility Increases
NASDAQ stock prices have been volatile of late and it’s that volatility that draws many traders to buy and sell NASDAQ stocks. Most traders are using computer algorithms and automated trading to perfect how they win in swinging stock prices. If you’re not using automated systems, you’re likely not going to keep up.
The NASDAQ volatility reflects the tug of war in US trade agreements, particularly in response to import tariffs levied on China.
NASDAQ 100 prices give a picture of large tech brands who are deeply affected when their products made cheaply in Asia can’t be imported freely into the US. In fact, they may face import tariffs into India, UK, Germany, Canada, Australia, Russia and South America as well.
Boom or Recession Affecting the NASDAQ Outlook?
Should you buy tech stocks during a potential recession? Some experts are suggesting buying underpriced stocks now, while others expect the NASDAQ to drop further yet. Volatility suggests and negative news drops suggest the market hasn’t hit bottom.
So as we make the transition to America First and away from China First, there is a period we’re in right now where stock markets will lag.
As this international disaster unfolds, the US and China have a cold war brewing. The US is likely to block China’s products in favor of developing US supply sources. The threat to national security is fairly apparent to everyone now. That should bode well for all NASDAQ stocks as we head into 2021.
They’ve made an argument however that they can’t move production to the US because the US doesn’t and never will possess the human talent needed. Then they announce they’ll move to other cheap labor countries where the fulfillment and educated human resources also don’t exist.
Even with higher tariffs, these foreign manufactured products still get imported, but they cost much more than other competitive products. That means sales will fall along with profits and these companies make most of their revenue from sales in the United States.
NASDAQ stocks also reflect business in services, particularly tech services although some NASDAQ stocks are in Fintech and Realtech.
Longforecast sees the NASDAQ rising over the next 2 two years, while others have predicted a downward trend in stock values.
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