Nasdaq composite why outperformed?

[fca2019]

The Nasdaq composite was up 15.5% in April, after falling 16.5% in Feb and Mar. nearly breaking even, compared to UK stocks not recovering.

It has outperformed the s&p 500 lately? Do you know why that is, and why the US market in general is so bullish in April?

[swill453]

The Nasdaq composite was up 15.5% in April, after falling 16.5% in Feb and Mar. nearly breaking even, compared to UK stocks not recovering.

Well it hasn't really broken even. To recover from a 16.5% drop it would have to rise by nearly 20%. Right now it's over 12% down from its February high.

Admittedly that's still far better than, say, the FTSE100. Maybe the likes of Amazon, doing relatively well in the crisis, have a big effect?

Scott.

[Lootman]

The Nasdaq composite was up 15.5% in April, after falling 16.5% in Feb and Mar. nearly breaking even, compared to UK stocks not recovering.

Well it hasn't really broken even. To recover from a 16.5% drop it would have to rise by nearly 20%. Right now it's over 12% down from its February high.

Admittedly that's still far better than, say, the FTSE100. Maybe the likes of Amazon, doing relatively well in the crisis, have a big effect?

If you look at the constituents of the Nasdaq 100, you will see Amazon is at a little over 10%. Include MicroSoft and Apple - the other two trillion dollar market cap companies - and you are at about one third. Throw in the two share classes of Google and you can call that 40%. Add FaceBook and Netflix to the mix and you are at 50% give or take.

Those handful of names are even about 20% of the S&P 500 - a level of concentration not seen since the 1980s.

So on the one hand they look dangerously overpriced. On the other hand, what other companies are sitting with tens of billions in cash, little or no debt, growing earnings at 10% to 15% a year, and are relatively unaffected by the virus?

[dealtn]

The Nasdaq composite was up 15.5% in April, after falling 16.5% in Feb and Mar. nearly breaking even, compared to UK stocks not recovering.

Well it hasn't really broken even. To recover from a 16.5% drop it would have to rise by nearly 20%. Right now it's over 12% down from its February high.

Admittedly that's still far better than, say, the FTSE100. Maybe the likes of Amazon, doing relatively well in the crisis, have a big effect?

If you look at the constituents of the Nasdaq 100, you will see Amazon is at a little over 10%. Include MicroSoft and Apple - the other two trillion dollar market cap companies - and you are at about one third. Throw in the two share classes of Google and you can call that 40%. Add FaceBook and Netflix to the mix and you are at 50% give or take.

Those handful of names are even about 20% of the S&P 500 - a level of concentration not seen since the 1980s.

So on the one hand they look dangerously overpriced. On the other hand, what other companies are sitting with tens of billions in cash, little or no debt, growing earnings at 10% to 15% a year, and are relatively unaffected by the virus?

Not sure I would agree Amazon is relatively affected by the virus. Turnover is up, but so are the costs of fulfilling them. They have (successfully) played the game of turnover vs profits in the past, of course, but that doesn't mean they will be as successful going forward. I have called this wrong many times!

[Lootman]

Well it hasn't really broken even. To recover from a 16.5% drop it would have to rise by nearly 20%. Right now it's over 12% down from its February high.

Admittedly that's still far better than, say, the FTSE100. Maybe the likes of Amazon, doing relatively well in the crisis, have a big effect?

If you look at the constituents of the Nasdaq 100, you will see Amazon is at a little over 10%. Include MicroSoft and Apple - the other two trillion dollar market cap companies - and you are at about one third. Throw in the two share classes of Google and you can call that 40%. Add FaceBook and Netflix to the mix and you are at 50% give or take.

Those handful of names are even about 20% of the S&P 500 - a level of concentration not seen since the 1980s.

So on the one hand they look dangerously overpriced. On the other hand, what other companies are sitting with tens of billions in cash, little or no debt, growing earnings at 10% to 15% a year, and are relatively unaffected by the virus?

Not sure I would agree Amazon is relatively affected by the virus. Turnover is up, but so are the costs of fulfilling them. They have (successfully) played the game of turnover vs profits in the past, of course, but that doesn't mean they will be as successful going forward. I have called this wrong many times!

My crystal ball isn't any better than yours, but Amazon is up from about 1,900 at the beginning of this year, to about 2,300 at the moment. That's up 21% YTD when the market is well down because of the virus. It's quite remarkable that it has performed like a defensive stock given its history. It's never a boring hold.

[dealtn]

If you look at the constituents of the Nasdaq 100, you will see Amazon is at a little over 10%. Include MicroSoft and Apple - the other two trillion dollar market cap companies - and you are at about one third. Throw in the two share classes of Google and you can call that 40%. Add FaceBook and Netflix to the mix and you are at 50% give or take.

Those handful of names are even about 20% of the S&P 500 - a level of concentration not seen since the 1980s.

So on the one hand they look dangerously overpriced. On the other hand, what other companies are sitting with tens of billions in cash, little or no debt, growing earnings at 10% to 15% a year, and are relatively unaffected by the virus?

Not sure I would agree Amazon is relatively affected by the virus. Turnover is up, but so are the costs of fulfilling them. They have (successfully) played the game of turnover vs profits in the past, of course, but that doesn't mean they will be as successful going forward. I have called this wrong many times!

My crystal ball isn't any better than yours, but Amazon is up from about 1,900 at the beginning of this year, to about 2,300 at the moment. That's up 21% YTD when the market is well down because of the virus. It's quite remarkable that it has performed like a defensive stock given its history. It's never a boring hold.

Agreed, and to be clear I wasn't commenting on the level of its share price, and whether it has changed, is under or overvalued. The observation that it is unaffected by the virus didn't seem right to me that was all given the surge in both turnover and costs.