The NASDAQ 100 index has been trading lower over the past week as tech giants such as Alphabet Inc, Amazon.com, Microsoft Corp, Meta Platforms, and Netflix Inc all plummeted, as investors digested a slew of economic data, disappointing earnings results, and weak forward guidance.
NASDAQ 100 underperformed the rest of the U.S. benchmark indices in 2022 and its performance is likely to remain in the shadow of the Dow Jones Industrial Average in the coming months. From their respective all-time highs, the Dow Jones shed 13%, the S&P 500 declined 21% and the NASDAQ 100 slumped 33% as of Friday.
Analysts have lowered their expectations for the third quarter reporting season, which led to many ‘’beats’’, but gloomy earnings and warnings by growth companies’ executives, including Microsoft, Alphabet, Amazon, and Meta, ignited concerns that the aggressively rising interest rates are slowing down economic growth and is impacting corporate earnings.
On Thursday the U.S. Bureau of Economic Analysis released GDP data for Q3 2022, showing that the economy grew 2.6% YoY exceeding forecast of 2.4% and rebounding from a contraction in the previous two quarters. Excluding trade and inventories, real final sales to domestic private purchasers increased at an anaemic 0.1%, according to government data.
On Friday the Federal Reserve’s favourite inflation rate, the PCE price index was released and showed core inflation came slightly weaker than expected. This raised hopes among investors that a smaller interest rate hike could be delivered in December, while at present the market has fully priced in another 75-basis point hike in November. The weak corporate reports, along with data suggesting the economy is softening is also raising hopes that the Fed could take a less aggressive approach at its December meeting.
Shares of large cap tech companies such as Microsoft, Alphabet and Meta Platforms, which reported downbeat earnings earlier this week, have traded deeply in the red. Amazon.com joined the club of Big Tech firms that have disappointed investors also forecasting a slowdown in sales growth. Apple cautioned revenue growth could see some pressure in the December quarter, but the overall result showed some resilience.
Until we see clear signs of inflation is slowing and a Fed pivot, equity markets are likely to remain volatile and under selling pressure. The daily chart shows that the tech heavy NASDAQ 100 index could extend its corrective rebound in the short-term but is facing heavy overhead resistance from its medium-term down trend line crossing at 12,600. Overall, momentum indicators remain weak at this juncture in time, there are no preliminary signs of the down trend reversing course, therefore we favour further downside in the months ahead.
Nimble traders looking to gain exposure to the QQQ ETF may use our 3x US Tech ETP to take advantage of short-term rebound, and our -3x US Tech ETP to capture short-term declines.
Violeta è entrata a far parte di Leverage Shares nel settembre 2022. È responsabile dello svolgimento di analisi tecniche e ricerche macroeconomiche ed azionarie, fornendo pregiate informazioni per aiutare a definire le strategie di investimento per i clienti.
Prima di cominciare con LS, Violeta ha lavorato presso diverse società di investimento di alto profilo in Australia, come Tollhurst e Morgans Financial, dove ha trascorso gli ultimi 12 anni della sua carriera.
Violeta è un tecnico di mercato certificato dall’Australian Technical Analysts Association e ha conseguito un diploma post-laurea in finanza applicata e investimenti presso Kaplan Professional (FINSIA), Australia, dove è stata docente per diversi anni.
Julian è entrato a far parte di Leverage Shares nel 2018 come parte della prima espansione della società in Europa orientale. È responsabile della progettazione di strategie di marketing e della promozione della notorietà del marchio.
Oktay è entrato a far parte di Leverage Shares alla fine del 2019. È responsabile della crescita aziendale, mantenendo relazioni chiave e sviluppando attività di vendita nei mercati di lingua inglese.
È entrato in LS da UniCredit, dove è stato responsabile delle relazioni aziendali per le multinazionali. La sua precedente esperienza è in finanza aziendale e amministrazione di fondi in società come IBM Bulgaria e DeGiro / FundShare.
Oktay ha conseguito una laurea in Finanza e contabilità ed un certificato post-laurea in Imprenditoria presso il Babson College. Ha ottenuto anche la certificazione CFA.