The NASDAQ-100 is a stock market index made up of 103 equity securities issued by 100 of the largest non-financial companies listed on the Nasdaq stock market. It is a modified capitalization-weighted index.Since April 2020, NASDAQ-100 has seen a growth of almost 5000 points in 6 months, most ever in its history of trading.
Driven by tech stocks the NASDAQ provides volatility regularly and is set to increase with the US Elections Next week.
So what is the reason for this surge?
The markets sees the value in tech stocks due to the real world reality of negative real interest rates.
With markets convinced that there is little chance that rates will rise in the foreseeable future,prices of other assets from Gold to Bitcoin have benefited as well.
Tech firms revenue streams are tilted far into the future, they have benefited disproportionately from low interest rates.
The market has been very noisy in the tech area as seen in the last 4 months due to longer candles on higher time frames, setting new highs.
A lot of analysts are calling this NASDAQ-100 rally a bubble, but tech is here to stay and there is a lot more participation in the tech world in the pandemic era more than ever before. With more people working from home than ever and the US presidential elections, it will be an interesting market even to watch out for.
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