NASDAQ Forecast 2022
Where to invest in 2022? Should you look for the best stocks on the Dow, S&P 500, Russell or the NASDAQ? The upward trajectory of the NASDAQ looks much like the Dow Jones, however tech stocks are in a period that’s resulting in stronger volatility.
Expert advisors are pushing sell button on most NASDAQ stocks and mentioning that some of them are potentially dangerous to hold onto. It’s uncertain why more investors, especially fund managers hold onto tech stocks in this climate.
The NASDAQ has suffered greater volatility swings than the S&P and Dow due to rising interest rate costs, consumer spending threats, microchip supply shortages, and inflation. It’s down 1300 points in the last month alone, to 12,843, a trend that’s contributing to lower stock market predictions. Inflation in particular is expected to hurt consumers bank accounts and could begin to slow their spending. See the NASDAQ 2 year forecast from longforecast.com below.
The Nasdaq 100 has fallen 21% since a record close in late November amidst soaring inflation and disappointing tech giant earnings. Tech has gone through a Fed stimulus driven bubble that might be burst with the end of easy money and low interest rates. Tech’s investment in cryptocurrency is another uneasy point too. Bitcoin and Ethereum have been some of most volatile assets going. Integrating crypto and block chain into the financial system is likely to cause big concerns going forward.
In the meantime (next 3 months) consumers will prepare to spend, but more on travel, food, and accommodation. Inflation overall is at 8%. Costs in those sectors has risen strongly. Estimates of 50% food price increases in Europe are likely to result in rising US prices, and US exports will increase, thus growing demand for US dollars, which in turn raises inflation further.
The inflationary spiral is running long now and NASDAQ investors may be underestimating the erosion of consumer demand in future. US consumers are already paying $300 more per month. Many of the metals and plastics used in electronic devices that businesses and consumers are growing fast in price too.
And for EVs the price of nickel, copper, palladium, aluminum, and plastics will erode manufacturers profit margins. This could make some EV brands unsustainable, which would help Tesla, but make US automakers foray into non gas powered vehicles a painful one. If the economy teeters into recession, the high cost profile of tech companies might make them the first to succumb in a stock market crash.
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. Meta, Paypal, Netflix are losers yet other FAANGS such as Google and Apple are holding their own during a negative phase.
Google’s purchase of a digital security firm acknowledges an additional threat or cost of Russian conflict. Rumors have it that Russia’s government will make software piracy legal (wasn’t legal there before?) so the threats to software companies persists. Costs will be rising, staff and wages trimmed, making AI more inviting and encouraging better utilization of technology and upskilling the best talent.
Currently, loyalty from workers isn’t high in silicon valley and tech hubs. These difficulties will create new demand for efficiency-related solutions.
Meta or Facebook has plunged, falling out of investors favor, despite the huge advertising windfall. Can you imagine what would have happened if Facebook didn’t have the ad revenues? The venture into metaverse insanity might reflect the tech sector’s fantasy/growth expectations in the last 15 months. Reality might reappearing for some tech stocks.
Best Nasdaq Stocks of Late
Avoiding being too negative about the future prospects of big tech, let’s take a look at few NASDAQ stocks bucking the downward tend.
Yahoo Finance’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)
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.
Longforecast Sees the NASDAQ Decaying over the next 3 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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