Posted on 04/25/2017 7:01:50 AM PDT by SeekAndFind
The Nasdaq breached the 6,000 mark for the first time ever on Tuesday, spurred by a raft of strong corporate earnings and President Donald Trump's promise of a major tax reform plan.
The tech-heavy Nasdaq rose as much as 0.4 percent to hit a record level of 6,007.72 helped by gains in Biogen (BIIB.O) and Apple (AAPL.O).
The index first breached the 5,000 mark on March 7, 2000 and closed above that level two days later during the height of the tech boom. Biogen's shares jumped more than 4 percent after the biotech company reported better-than-expected quarterly profit and revenue on Tuesday.
At 9:36 a.m. ET, the Dow Jones Industrial Average .DJI was up 184.02 points, or 0.89 percent, at 20,947.91, the S&P 500 .SPX was up 9.71 points, or 0.41 percent, at 2,383.86 and the Nasdaq Composite .IXIC was up 22.27 points, or 0.37 percent, at 6,006.09.
Trump promised last week to make "a big tax reform and tax reduction" announcement on Wednesday. The president has directed his aides to move quickly on a plan to cut the corporate income tax rate to 15 percent from 35 percent, a Trump administration official said on Monday.
Nine of the 11 major S&P 500 sectors were higher, with materials .SPLRCM and financials .SPSY in the lead.
Better-than-expected profits at McDonald's (MCD.N) and Caterpillar (CAT.N) helped the Dow outperform other major Wall Street indexes.
Tuesday's gains build on a day-earlier rally, which was driven by the victory of centrist candidate Emmanuel Macron in the first round of the French presidential election. Polls show Macron is likely to beat his far-right rival Marine Le Pen in a deciding vote on May 7.
(Excerpt) Read more at reuters.com ...
Win.
I remember when the NASDAQ (QQQ) hit 5,000 for the first time ever in Y2000. I was working at the NASDAQ stock market and every one was celebrating.
It proceeded to drop by 1,500 points a few months later. It took 16 years for it to return to 5,000.
We are in unexplored territory. Never in the history of the world have global central banks together pushed so much low-interest money into their financial systems. Global Central Bank assets are near to $30 Trillion, whereas they were around $6 Trillion before the 2008 financial crisis.
Stocks to watch:
SILC - Silicom
Silicom Ltd., together with its subsidiaries, designs, manufactures, markets, and supports networking and data infrastructure solutions for a range of servers, server based systems, and communications devices
AUDC - Audiocodes
AudioCodes Ltd. designs, develops, and sells Voice over IP (VoIP), converged VoIP, and data networking products and applications for enterprise unified communications, contact centers, service provider business services, mobile VoIPs, and cloud virtualized data centers worldwide.
Both based in Israel.
It jumped on news that a globalist will likely win in France.
Not a win in that way.
A “business as usual” win
LOL Good one...
Unlike the DOW & the S&P 500, the NASDAQ at 6,000 is not in a P/E ratio bubble position as it was in the late-90s tech bubble.
However, the DOW and the overall equities markets are in P/E ratio positions that are, based on P/E ratio history, a definite bubble territory.
If the DOW and the equities market in general moves into a major market correction position, the affect can spill over into NASDAQ stocks as well.
From the above article:
“.... spurred by a raft of strong corporate earnings and President Donald Trump’s promise of a major tax reform plan.” <-— This is a good reason for a stock market rally.
However, further down:
” .... which was driven by the victory of centrist candidate Emmanuel Macron in the first round of the French presidential election. Polls show Macron is likely to beat his far-right rival Marine Le Pen in a deciding vote on May 7.” <-— This is a lousy and unconvincing reason if it is a factor for this surge.
Speculators, as opposed to rational investors, jump at odd news (odd to us) often, thinking they are “getting at the head” of a market-valuation rise, before actual corporate earnings & investment news shows a foundation for it.
However, some companies can play a large part of a market index, and when that fact is combined with the same fact for just a few companies in the same index, with good reason, the index itself can seem to advance greatly, even though just a few companies were involved in that advance.
Apple and Biogen were the two companies the article mentioned as leading the surge on the NASDAQ. Apple by itself is 13% of the NASDAQ value. Just five other companies alone represent 34% of the NASDAQ - Google, Amazon, Facebook, Gilead and Netflix. With Apple that makes 47% of the NASDAQ that can move the whole index with cause by just six companies.
Index funds have proliferated and an index fund based on the NASDAQ can have some outstanding gains, driven by just a few companies, without picking individual companies. At other times, it can be a lackluster performer, performing below what some individual NASDAQ companies might do.
Very good post!
Some people are fascinated by numbers ending in zeros. 7000 is hardly different from 6999 or 7001.
Bubbles occur when everyone is jumping into the market and taxi drivers are giving out stock advice.
As it stands, many have not gotten back in from the recent crash.
>>many have not gotten back in from the recent crash.
Americans maybe.
“China Investment In The U.S. Hit An All-Time High In 2016, But Don’t Expect The Same In 2017”
https://www.forbes.com/sites/ellensheng/2016/12/18/chinese-investments-in-the-u-s-hit-an-all-time-high-in-2016-but-dont-expect-the-same-in-2017/#5a83a19f5abe
“All your bubble are berong to us. Ha Ha Ha”
Who woulda thought it after the NASDAQ dropped by half in the spring of 2000 - seemed unlikely it would ever hit 5000 again - the US economy is a wondrous thing (when managed correctly)......
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