Nasdaq 100 on pace for best January since 1999

The Nasdaq 100 Stock Index is on pace for its best January since 1999 despite warning signs from the likes of Microsoft Corp. and Intel Corp. and another expected interest-rate hike from the Federal Reserve. The Cboe Volatility Index sank within striking distance of a 10-month low on Friday, signalling less angst in the market. Meanwhile, options trading on megacaps last week showed demand hasn’t jumped for protection against a selloff.

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ETF composition - Invesco QQQ

Invesco QQQ correspond to the price and yield performance of the NASDAQ–100 Index®. 

The Index includes 100 of the largest domestic and international nonfinancial companies listed on the Nasdaq Stock Market based on market capitalization. The Fund and the Index are rebalanced quarterly.

• holdings https://www.invesco.com/us/financial-products/etfs/holdings?audienceType=Investor&ticker=QQQ
• Fidelity screener: https://screener.fidelity.com/ftgw/etf/goto/snapshot/portfolioComposition.jhtml?symbols=QQQ

Nov 18, 22; finviz charts, by vol https://finviz.com/screener.ashx?v=211&t=AAPL,MSFT,AMZN,GOOG,GOOGL,TSLA,NVDA,PEP,COST,META,AVGO,CSCO,TMUS,TXN,ADBE,AMGN,CMCSA,HON,QCOM,NFLX,INTC,AMD,SBUX,INTU,ADP,GILD,PYPL,ISRG,AMAT,MDLZ,ADI,VRTX,REGN,BKNG,MRNA,CSX,MU,FISV,LRCX,CHTR,ATVI,KLAC,ORLY,KDP,MNST,MAR,ASML,PANW,SNPS,MELI,AEP,KHC,CTAS,ADSK,CDNS,NXPI,DXCM,BIIB,PAYX,LULU,ENPH,FTNT,MCHP,ABNB,AZN,EXC,ROST,MRVL,XEL,DLTR,EA,PCAR,ILMN,IDXX,WBA,ODFL,PDD,CTSH,CPRT,CEG,CRWD,FAST,WDAY,JD,VRSK,EBAY,SIRI,SGEN,DDOG,ANSS,VRSN,ZM,ZS,LCID,BIDU,TEAM,ALGN,SWKS,MTCH,SPLK,NTES,DOCU&ta=0&o=-volume

Nasdaq 100 valuations return to pre-pandemic levels

The P/E ratio of the Nasdaq 100 has returned to pre-pandemic levels. In theory, that would indicate all the steam has been let out. But think back to the conversations investors were having in late 2019 and early 2020. It bore a resemblance to the same issues being talked about now: extreme valuations, a slow down in growth, a tight labor market and a prolonged rally thanks to Fed support.

If those concerns were surfacing at pre-pandemic valuations, then returning to those levels doesn't necessarily bolster the bull case as is the instinct to do. (Especially with the same issues.) Instead, it signals there may be more selling as markets recalibrate.

Growth spurt sends Nasdaq 100 near record versus the Dow

“The dominant theme in recent months has been growth, not quality” in U.S. stocks, according to Ari Wald, Oppenheimer & Co.’s chief technical analyst. He drew the conclusion in a weekend report that compared the Nasdaq 100 Index with the Dow Jones Industrial Average. 

The ratio between the two U.S. equity benchmarks closed a week ago at its highest level since March 2000, according to data compiled by Bloomberg. The milestone followed a 16% rally from this year’s low, set May 10. Faster-growing companies are poised to sustain their strength, Wald wrote, as the dollar rises and inflation slows.

Chinese tech stocks enter bear market

Chinese technology stocks parted company with U.S. peers long before Wednesday, when they dropped after Tencent Holdings Inc. reported its first earnings decline in a decade. The Invesco China Technology exchange-traded fund started this month in a bear market after sliding more than 20 percent from a peak on Jan. 26. Wednesday’s slump extended the loss to 30 percent. The larger drop contrasted with a 4.9 percent gain for the Invesco QQQ ETF, tracking the Nasdaq-100 Index, in the same period.

FANG-related index seen as not-so-new new thing

Intercontinental Exchange Inc.’s new index that incorporates the FANG stocks looks all too familiar to Tom McClellan, editor of the McClellan Market Report, judging by a note on Friday. He compared the performance of the NYSE FANG+ Index, the basis for futures that started trading last week, and a ProShares exchange-traded fund,TQQQ, that aims for twice the daily performance of the Nasdaq-100 Index. “So congratulations ICE, you just invented a futures contract that replicates an already-existing leveraged ETF,” McClellan wrote.