NASDAQ Stock Market Forecast
November 13, 2019. What’s so important about the NASDAQ these days? Well for one, the NASDAQ composite index and NASDAQ 100 are the most reliable indicator of the profitability of technology companies.
As an investor, you might prefer the NASDAQ to S&P, Russell Index, or the DJIA. And those indexes are hitting all time records too. It’s hard to ignore the rising value of the NASDAQ in the stock market investing. See the long range forecast below.
To the US, Canada and Mexico, technology companies represent the future of the economy. Technology has entered every area of the economy including marketing, transportation, manufacturing, energy, finance, real estate, and even farming and mining. In fact AI is improving marketing and stock prediction quickly.
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.
The NASDAQ closed at a fresh high recently at 8486.09.
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.
A forecast for the NASDAQ hinges on political views, economic outlooks, and a lot of debatable matters. 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.
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.
That makes the NASDAQ predictions fairly optimistic and the index is near record highs, although lately it’s down. But, after the 2020 market lull, the NASDAQ and other stock markets should roar back in 2021. This outlook hinges on President Trump being able to calm trade tensions and force US multinationals to repatriate production back to the US. If he’s successful, we should see the NASDAQ and S&P soar for many years.
If President Trump fails to get re-elected and foreing imports come flooding back, the outcome would be disastrous for the US economy, but perhaps not as bad for NASDAQ listed companies such as Apple, Google, Facebook, and Amazon who outsource services and labor to Asia. A reversal of American trade policy would likely lead to a stock market crash.
Top Performing Stocks on the NASDAQ
Top Sectors to Look for on the NASDAQ?
Barchart’s weighted weighted alpha gives you a performance stat based on the last 12 months with emphasis on recent activity. You can read more on the NASDAQ site.
They rate Gold & Silver, Sugar and confectionaires, cookies, industrial coatings, soaps detergents, securities exchanges, property rental, lawn and garden tractors, solar, sausages & poultry processing, meat packing plants, and water supply technology as the top picks.
What Causes NASDAQ Volatility?
Stock market 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.
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, 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, 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 before a potential recession? Most forecasts for US stock markets are negative. As this graph shows, the estimate for all stock indexes reflect a belief in a recession. The economic forecast comes out of technical factors such as the inverted yield curve, and because the global economy is sinking without US support.
And the US stock markets don’t reflect the growing health of US small businesses which are growing in profit and performance. SMBs aren’t publicly traded, and they’re not as dependent on foreign markets, although many mid caps do depend on multinational corporations for B2B business.
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.
With President Trump’s persistence about moving tech manufacturing back to the US, many NASDAQ CEOs are looking at either waiting it out till the 2020 election, or trying to shift manufacturing to other Asian countries just as Apple and Google are doing right now.
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, particular tech services although some NASDAQ stocks are in Fintech and Realtech.
Longforecast sees the NASDAQ rocketing upward in December 2020. Is this is anticipation of a Trump victory?
Are NASDAQ ETF’s the Way to Invest?
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