The Nasdaq-100 Index (NDX) is higher by 87.4% for the three years ending August 28. And the Magnificent Seven stocks are taking on larger percentages of other widely observed benchmarks.
Since 1999, the Invesco QQQ Trust ( NASDAQ: QQQ ) has been the “go-to” Exchange Traded Fund of institutions and aggressive growth-minded investors looking for Nasdaq-100 Index tracking and equivalent gains.
Subscribers to Chart of the Week received this commentary on Sunday, August 24.
Tech slump dragged QQQ lower as investors eye rotation into value ETFs like RPV, consumer staples ETFs like IYK, and dividend-focused ETFs like FDL.
Betting against growth and tech equities was a winning idea for a time earlier this year. But that span was fleeting.
The summer months and October are known being tough on stocks, but seasonal trends don't always repeat. Even when they do, it's not necessarily a call for long-term investors to move away from equities.
I reiterate my sell rating on QQQ as I now see at least five out of seven Ray Dalio bubble signs. QQQ trades at elevated P/E and PEG ratios, with valuations far above historical medians and growth expectations appearing unsustainable. Massive fund inflows and widespread bullish sentiment suggest frothy conditions, with investors piling into pricey tech stocks.
QQQ surged on Nasdaq's record close as top holdings like AVAH and RUN posted explosive double-digit gains.
Tech ETFs like DAPP, ARKQ and IBLC surged on Monday as strong earnings and rate cut hopes reignited investor confidence.
SPY and QQQ are likely to rebound as Morgan Stanley and Goldman Sachs see that the recent market dip as a bullish buying opportunity.
There's a daily onslaught of AI headlines and often tantalizing intraday moves notched by some related stocks. Some investors are tempted to take short-term views of the artificial intelligence investment thesis.
Stocks surged as a U.S.-Japan trade deal and EU progress boosted optimism ahead of a key tariff deadline. Growth ETFs like RPG, FNY, RFG should rally ahead.