Where now for the Nasdaq 100?
In the first half of 2021, there was no shortage of gloomy comments on tech stocks. After being the stars of the market last year, it seemed like the technology was running out of space to rally.
The expected reopening of the global economy was meant to be the time when investors would step away from the 2020 FANG winners and find sectors and businesses that would benefit from people leaving their homes and returning to physical shopping and work at home. leaving offices, rather than working. and shop from the comfort of their own homes.
Unsurprisingly, this did not happen. Indeed, fund managers have rediscovered the allures of the sector, with huge inflows in recent weeks that have played a major role in the Nasdaq 100 reaching a new high, surpassing the 15,000 level for the first time in its history.
For a while, it looked like big tech stocks like Amazon would continue to struggle. A stellar year in 2020 meant that the stock prices of the FANG names had risen very quickly, but from September onwards the relentless gains started to stagnate.
Other sectors began to take over leadership, and a rise in Treasury yields seemed to suggest that the era of buying tech stocks was over, given their valuations were so high that a much of the risk seemed to be skewed towards the downside.
The Nasdaq 100 is currently at an all time high, having enjoyed huge gains since May. Sentiment around this index and heavyweight names like Amazon has undergone a major shift in the past six months as investors shifted from growth to value and then back again.