Will the Nasdaq continue to rise?
After the NASDAQ hit an all-time intraday high earlier this week, investors the world over were wondering what’s to be expected from the index over the short term.
The NASDAQ Composite made back-to-back gains over four days this week, with the NASDAQ 100 representing the non-financial sector, closing up 1.32% on Wednesday. Companies like the ‘FANG’ grouping of Facebook (FB), Amazon (AMZN), Netflix (NFLX), and Alphabet (GOOGL) all posted impressive gains.
The explosive effect was felt across the board of US indices on Thursday, with the S&P 500 index climbing 0.22% and the Dow Jones Industrial Average rising 0.33%.
As a result of the upward momentum, some portfolio managers are gung-ho that now is the time to take aggressive medium-term positions, with Stifel Nicolaus portfolio manager, Chad Morganlander commenting that investors should expect a 7-9% return from portfolios invested in the index over the next twelve months.
Other leading analysts, such as Chris Veronne (Strategas Research Partners), have joined the chorus of those forecasting gains for the index. Veronne explained that the NASDAQ was hitting its recent zeniths after “15 years of purgatory,” observing that 20% of the index’s stocks were reaching new highs.
Many are continuing to refer to the favorable market conditions as the ‘Trump Rally,’ seeing the President-elect’s pro-growth stance as responsible for the ongoing buoyancy in the index’s valuation. Some of Thursday’s gains were the best since election day.
Standard Bank’s fixed income analyst Steve Barrow referred to the current securities rally as demonstrating investors’ “animal spirits” in the wake of the election, referring to a phrase popularized by the famous economist John Maynard Keynes, meaning gut instinct decisions made at a time of significant volatility.
Trump has proposed a raft of business-friendly measures designed to boost the country’s ailing infrastructure. These analysts view the current conditions as a bet by investors that he will deliver on his promise to “make America great again.”
Those gains are certainly being felt by the NASDAQ, which has picked up 4.4% over the 30- day period in the immediate aftermath of the US election. Looking to the medium term, many traders, especially those using online platforms such as UFX.com, see further gains on the horizon.