Zhitong Finance and Economics learned that as of Friday, U.S. stocks **,The Nasdaq 100 index, known as the "bellwether of global technology stocks", hit an all-time high**, up a staggering 52% so far in 2023, well above the 20% technical bull market threshold, and is on track to be its best year since 2009. In the week when the Nasdaq 100 index, which includes big tech stocks such as Apple, Microsoft and Google, hit new highs, the Fed unexpectedly "let go": the move to raise interest rates aggressively to curb inflation has ended, and a rate cut in 2024 is on the table.
As of Friday, the Nasdaq 100 was 052% to 1662345 points, surpassing the 16,573 set in November 2021**34 points is the peak point. Since January, the risk on momentum in the U.S. market has only increased, and the index is on track for its fastest year since 2009. According to data compiled by institutions, the "junk-rated bond ETF" in the U.S. market has seen an unprecedented inflow of more than $15 billion in the past six weeks, reflecting the risk on investors, and the market's risk appetite has risen sharply.
The Nasdaq 100 index, which covers the hottest technology stocks in the U.S., has risen almost uninterruptedly since January of this year, after a dismal performance in 20222023 can be described as "all the way forward" with the help of the global AI boom, forcing global investors to catch up. The Nasdaq 100 had its best first-half performance in U.S. equity history, and in November, the index recorded an increase of about 11%, the highest monthly gain since July 2022. This week, the Federal Reserve unexpectedly expressed its ** stance, emphasizing that the interest rate hike cycle has basically ended, and began to discuss the timing of interest rate cuts, and the momentum of risk on has further strengthened.
The last time the Nasdaq 100 hit an all-time high was shortly after Federal Reserve Chair Jerome Powell used the word "transitory" when describing inflation in the United States. However, the Fed's policymakers did whatever it took to rein in the pressures, sending U.S. stocks, and even the world, tumbling across the board over the next year, particularly hitting the tech-heavy Nasdaq 100 index, which at one point lost about a third of its total market capitalization.
This year's "epic" U.S. technology stocks are inseparable from the global AI boom, and investors have high expectations for the technology industry, stimulated by the general trend of global companies deploying generative AI. This AI boom has directly contributed to the cumulative triple-digit gains of the seven major tech giants in the United States. The seven Magnificent Seven in the U.S. include Apple, Microsoft, Google, Tesla, Nvidia, Amazon, and Meta Platforms.
This week, the bulls in the U.S. market are extremely optimistic that the Fed's latest "FOMC dot plot" shows that the Fed's pace of interest rate cuts in 2024 will be faster than the September dot plot, and may even be faster than the 75 basis point rate cut implied by the latest dot plot, so the hype about "interest rate cuts" will continue to support U.S. stocks higher.
The median expectations for the latest FOMC dot plot show that the Fed is likely to cut rates by 25 basis points at least three times in 2024, much more aggressive than the Fed's expectations in September and higher than the 50 basis points cut expected by economists surveyed by Bloomberg. However, market expectations for interest rate cuts are more aggressive, with interest rate ** markets betting that the Fed will cut rates by up to 150 basis points next year.
Technology stocks continue to be the leader in the U.S.**," said Mary Ann Bartels, chief investment strategist at Sanctuary Wealth. "AI will be transformative in terms of productivity growth. Despite the good performance of tech companies, their profitability is just starting to rise modestly, so as long as we remain in a earnings-poor environment, the tech rally next year is likely to continue to outperform those value stocks. ”
It is worth mentioning that the Nasdaq-100 is no stranger to the "long failure to set new records" – in the more than 15 years since the dot-com bust burst, the index has not managed to break the previous record.
Next year's Nasdaq 100 Index "Playing and Dancing"?
As of December 13, AAII's latest survey data shows that the highly watched U.S. stock bullish confidence index has risen rapidly to more than 50%, and the proportion of investors who are bullish on the trend of U.S. stocks in the next 6 months or so has surged compared with the middle of November, and the bullish proportion is much higher than the historical average data.
The downward trend of benchmark interest rates has provided significant support for the Nasdaq 100 index, which has long-term investment attributes. Gary Bradshaw, portfolio manager at Hodges Capital Management in Dallas, Texas, said. "If you look at the fundamentals of the index, you can see that the fundamentals of big tech and the other companies in the index are strong, which should support further trends in the index. ”
Michael O, Chief Market Strategist at JonesTrading'Rourke even stated:"The market has gone too far and too fast, and the Fed's instantaneous reversal of its stance could trigger capitulative buying power. ”
Wedbush, a well-known investment institution on Wall Street, recently released a report sayingEven after achieving "epic big**" this year, it is expected that the overall US technology stocks will ** at least 20% in 2024. The agency expects the global technology industry to boom as artificial intelligence (AI) application scenarios continue to expand from next year, AI and cloud computing spending will increase significantly next year.
Wedbush insisted on likening the impact of AI on business applications and the technology side to the internet, saying analysts at the agency were in the "1995 moment" (the beginning of the Internet's explosion of development). Wedbush senior analysts, led by Dan Ives, wrote in a note: "We believe that artificial intelligence is the most transformative technology trend since the official birth of the Internet system in 1995. In our view, many Wall Street analysts are still underestimating the scale of AI spending over the next 10 years, which we expect to reach $1 trillion.
"Based on our recent survey data in this space, fundamental expectations for growth tech companies are rock-solid," the agency said. ”“A new tech bull market has arguably begun, and tech stocks are poised for strong performance in 2024, with the Nasdaq 100, the benchmark for US tech stocks, rising more than 20% next year led by big tech companies, as a wave of AI spending hits the broader tech sector. ”