The Nasdaq 100 index has been criticised as being more volatile than the S&P 500 index. This is naturally true as it comprises 100 companies rather than 500 but this increase in exposure has historically led to higher returns as technology stocks have been less affected by large downturns in the market.
Nasdaq 100 market outlook
In the past 10 years the NDX has gained 207 per cent and the S&P 500 87per cent with the NDX having larger returns in ten of the last twelve years. The fact that the NDX is more exposed to volatility due to its smaller size has been negated by the fact that technology companies are thriving and finding new and exciting ways to generate revenue in a quickly evolving economy.
As for future growth, analysts have their concerns with the overall state of the economy and the third-quarter returns would indicate that they are correct. The Nasdaq100 index gained 1 per cent in the third quarter, compared with 22.47per cent in the first quarter of 2019.
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Global economic uncertainty surrounding Brexit and political instability in the US have fuelled an economic slowdown. The US Federal Reserve has moved to curb economic slowdown and it is a widely held belief that technology companies will perform more robustly than the economy overall.
This belief coupled with the fact that large capitalisation corporations have outperformed smaller companies in recent memory makes the NDX a safer alternative to other indices. The key word being safer as there is no one expecting the gains seen in the beginning of 2019 in the near future.
Nasdaq 100 market overview
The Nasdaq 100 Index (NDX) comprises 103 securities from the top 100 domestic and international non-financial companies listed on the Nasdaq stock exchange. It is a capitalisation-weighted index and its components are weighted according to the total market value of outstanding shares. It is considered a benchmark of the technology sector listed on the Nasdaq exchange and a premier large market capitalisation growth index.
The Nasdaq stock exchange was officially opened on February 8, 1971 and was the world’s first fully electronic stock exchange. During the late 1990s and 2000s the Nasdaq attracted the majority of new technology stock listings and became the second largest stock exchange in the world behind the New York Stock Exchange (NYSE) in total market capitalisation.
The Nasdaq 100 stock index was created in 1985 as an alternative large-cap benchmark index to the S&P indices. It comprises global market leaders in non-financial industries related to technology, telecommunications, retail and biotechnology.
TOP 5 Nasdaq index market movers
LAM Research Corporation (LRCX)
LAM Research is at the top of Nasdaq 100 market movers in 2019 and has a market capitalisation above $38bn and +98 per cent YTD stock price growth. LAM research was founded in 1980 and specialises in the design, manufacturing and sales of semiconductor processing equipment used in the production of microchip technology. In its most recent reporting cycle LRCX outpaced the majority of analysts’ expectations by posting earnings of $3.18 per share.
KLA - Corporation (KLAC)
As the second fastest of NasdAQ 100 market movers in 2019 KLA Corporation (KLAC) has a market capitalisation above $26bn and +89 per cent YTD stock price growth. Formed in 1997, KLAC is a capital equipment company specialised in semiconductor manufacturing equipment and yield management systems. KLAC global operations in manufacturing, R&D and support are located in the US, Europe, Israel, Japan and throughout the Asia/Pacific region. KLAC stock has gained 4.19 per cent in the past month, outpacing the computer and technology sector gains of 2.38 per cent.
Mercadolibre Incorporated (MELI)
Mercadolibre Incorporated (MELI) is third on the list of NASDAQ 100 movers in 2019 with a market capitalisation above $27bn and +87 per cent YTD stock price growth. MercadoLibre (“free market” in Spanish) is an Argentine company incorporated in the US. It has developed and operates online markets and auction throughout Latin America and is the most frequently used e-commerce platform in Spanish American countries. It also operates a secure payment system and processes more than 150 million online transactions annually.
Advanced Micro-Devices (AMD)
As one of the top Nasdaq 100 risers in 2019, Advanced Micro Devices (AMD) has a market capitalisation above $34bn and +77 per cent YTD stock price growth. AMD was founded in 1969 by Jerry Sanders and a group of his colleagues. They formed AMD which would become a multinational semiconductor company and the main rival to Intel. AMD develops computer processors for business and consumer markets and has become known for its strategy of “fabless” production, meaning it has outsourced all fabrication of its products while continuing to develop new technology. The company has faced criticism in the past for its use of conflict minerals but has shown strong initiative in its efforts for accountability in the tech industry.
Lululemon Athletica (LULU)
Fifth on the list of the top Nasdaq 100 gainers in 2019 is Lululemon Athletica (LULU). Lululemon has a market capitalisation above $260bn and +71 per cent YTD stock price growth. Lululemon was founded in 1998 by Chip Wilson in Vancouver. Originally designed as a yoga-wear company, the clothing line has gained widespread appeal in almost all applications. It has expanded its product line, offering shirts, shorts, pants, lifestyle apparel and yoga accessories and has partnered with professional athletes to increase marketing exposure.
In the end
The Nasdaq 100 remains an evergreen market for traders all over the world. Being a home index for some of the largest global companies, the Nasdaq 100 is one of the most sought-after investment instruments for those looking to get a slice of blue-chip stocks.
Stay tuned to the latest market news, which can drive the Nasdaq 100 price movement. Track the performance of the top Nasdaq 100 gainers live and trade CFDs on major US stocks with Capital.com.
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