The major US stock indices
Indices
Stock market indices represents an index that measures a particular stock market or a segment of the stock market. These instruments are important investors as they help compare current price levels with past prices to calculate market performance.The main two parameters for indices are that they are both investable and transparent. For example, investors can invest in a stock market index by buying an index fund, which is structured as either a mutual fund or an exchange-traded fund, and track an index. The difference between an index fund’s performance and the index, if any, is called tracking error. Most major countries boast multiple indices. Commonly traded indices include the S&P 500, NASDAQ-100, Dow Jones Industrial Average (DIJA), EURO STOXX 50, Hang Seng Index, and many more.Stock market indices can be characterized or segmented by the index coverage set of stocks. The overall coverage of an index constitutes an underlying group of stocks, most commonly grouped together by underlying investor demand.How to Trade IndicesRetail brokers offer indices exposure through the use of contracts-for-difference (CFDs) or exchange-traded funds (ETFs). Each are popular ways to trade specific markets and are almost always on offer at most brokers.Investors can choose between multiple types of indices that traditionally fall within several categories. This includes country coverage, regional coverage, global coverage, exchange-based coverage, and sector-based coverage.All indices are ultimately weighted in a number of different ways. The most common mechanisms include market-capitalization weighting, free-float adjusted market capitalization weighting, volatility weighting, price weighting, and others.
Stock market indices represents an index that measures a particular stock market or a segment of the stock market. These instruments are important investors as they help compare current price levels with past prices to calculate market performance.The main two parameters for indices are that they are both investable and transparent. For example, investors can invest in a stock market index by buying an index fund, which is structured as either a mutual fund or an exchange-traded fund, and track an index. The difference between an index fund’s performance and the index, if any, is called tracking error. Most major countries boast multiple indices. Commonly traded indices include the S&P 500, NASDAQ-100, Dow Jones Industrial Average (DIJA), EURO STOXX 50, Hang Seng Index, and many more.Stock market indices can be characterized or segmented by the index coverage set of stocks. The overall coverage of an index constitutes an underlying group of stocks, most commonly grouped together by underlying investor demand.How to Trade IndicesRetail brokers offer indices exposure through the use of contracts-for-difference (CFDs) or exchange-traded funds (ETFs). Each are popular ways to trade specific markets and are almost always on offer at most brokers.Investors can choose between multiple types of indices that traditionally fall within several categories. This includes country coverage, regional coverage, global coverage, exchange-based coverage, and sector-based coverage.All indices are ultimately weighted in a number of different ways. The most common mechanisms include market-capitalization weighting, free-float adjusted market capitalization weighting, volatility weighting, price weighting, and others.
Read this Term snatched victory from the jaws of defeat – at least for the Dow industrial average and S&P index. The NASDAQ index still closed negative on the day as did the Russell 2000. However, both indices had moral victories after erasing most of the intraday declines (the Nasdaq was down -3.10% at session lows).
At session lows:
- The Dow industrial average was down -617.37 points or -1.98%
- S&P index was down -90.29 points or -2.31%
- NASDAQ index was down -352.81 points or -3.10%
At the end of the day:
- Dow industrial average rose 7.45 points or 0.02% at 31260.57
- S&P index rose 0.60 points or 0.02% at 3901.38
- NASDAQ index fell -33.87 points or -0.30% at 11354.63
- Russell 2000 fell -2.95 points or -0.17% at 1773.26
Fed’s Bullard speaking on FOXBusiness was anticipated by markets. Stocks were trading near low levels as he started to speak, with expectations he would be ultra hawkish.
Instead he maintained that he prefers 50 basis point hikes (and not 75 or 100 bps). He sees above trend growth going forward. He sees employment moving lower to perhaps less 3%, and does not see a recession in 2022 or 2023.
He DOES expect rates to rise to 3.5% by the end of the year which implies 50 basis point hikes at each Fed meeting until then. However, that is the cost of doing business to have his upbeat economic viewpoint.
Stocks started to bounce soon after he was done speaking.
The bad news for the indices is:
- The Dow still closed lower for the 8th consecutive week which has not been done since 1923
- The S&P and NASDAQ index also closed lower for the 7th consecutive week.
For the week:
- Dow industrial average fell -2.9%
- S&P fell -3.02%
- NASDAQ index fell -3.28%
The last month of trading has seen:
- Dow industrial average -10.15%
- S&P index -11.18%
- NASDAQ index -13.81%
Today the S&P index broke into bear market territory with the index falling -20.9% from its all-time high. However, the end of day rally has led to a close around -19% from that all-time high. Closing in bear market territory was averted.
The NASDAQ
NASDAQ
The Nasdaq Stock Market or NASDAQ is an American stock exchange. It trails only the New York Stock Exchange (NYSE) in market capitalization and is part of a network of stock markets and options exchanges.Launched back in 1971, NASDAQ is the acronym for the National Association of Securities Dealers Automated Quotations. Since then it is known simply as NASDAQ and has become one of the most influential exchanges worldwide.The NASDAQ was the world’s first electronic stock market, and has since assumed the majority of major trades that had been executed by the over-the-counter (OTC) system of trading.What Makes Up the NASDAQ?In particular, the exchange also features the NASDAQ Composite, which includes almost all stocks listed on the NASDAQ stock market. Along with the Dow Jones Industrial Average (DIJA) and S&P 500 Index, this is one of the three most-followed stock market indices in the United States.Overall, the NASDAQ stock market has three different market tiers. This includes the Capital Market, or an equity market for companies that have relatively small levels of market capitalization. The listing requirements for small cap companies are less stringent than for other Nasdaq markets that list larger companies with significantly higher market capitalization.Additionally, the Global Market is made up of stocks that represent the Nasdaq Global Market. The Global Market consists of 1,450 stocks that meet the exchange’s financial and liquidity requirements, and corporate governance standards.Finally, the Global Select Market is a market capitalization-weighted index made up of 1,200 US-based and international stocks that represent the Global Select Market Composite.
The Nasdaq Stock Market or NASDAQ is an American stock exchange. It trails only the New York Stock Exchange (NYSE) in market capitalization and is part of a network of stock markets and options exchanges.Launched back in 1971, NASDAQ is the acronym for the National Association of Securities Dealers Automated Quotations. Since then it is known simply as NASDAQ and has become one of the most influential exchanges worldwide.The NASDAQ was the world’s first electronic stock market, and has since assumed the majority of major trades that had been executed by the over-the-counter (OTC) system of trading.What Makes Up the NASDAQ?In particular, the exchange also features the NASDAQ Composite, which includes almost all stocks listed on the NASDAQ stock market. Along with the Dow Jones Industrial Average (DIJA) and S&P 500 Index, this is one of the three most-followed stock market indices in the United States.Overall, the NASDAQ stock market has three different market tiers. This includes the Capital Market, or an equity market for companies that have relatively small levels of market capitalization. The listing requirements for small cap companies are less stringent than for other Nasdaq markets that list larger companies with significantly higher market capitalization.Additionally, the Global Market is made up of stocks that represent the Nasdaq Global Market. The Global Market consists of 1,450 stocks that meet the exchange’s financial and liquidity requirements, and corporate governance standards.Finally, the Global Select Market is a market capitalization-weighted index made up of 1,200 US-based and international stocks that represent the Global Select Market Composite.
Read this Term index reached a new year – and cycle – low and traded down -31.93% from its all-time high reached in November before rebounding.
The Dow industrial average also reached a new cycle low as it fell to -17.09% from its January all-time high before rebounding into the close.
Next week earnings will be highlighted by:
- Zoom on Monday.
- Toll Brothers and Best Buy on Tuesday.
- Snowflake, Box, and Nvidia on Wednesday.
- Dell, Macy’s, Costco on Thursday.
All have the potential to tell a story about the market, the economy and inflation.
- Zoom is considered a pandemic stock, but does it have a more lasting place post pandemic?
- Toll Brothers expectations for future growth will be of interest as the Fed tries to slow down the rampant housing market
- Best Buy is another retail barometer. Will it show signs of slowing and price issues?
- Snowflake is one of those growth companies whose earnings have to grow into their elevated stock price. Even so, it’s stock is down -63.46% from its November high
- Nvidia is the darling of the chip stocks, but is down -48% from its all-time high
- Dell is barometer for of computer demand
- Macy’s a brick-and-mortar retailer is trying to do more business online. What do they see from the consumer?
- Costco as close as April 8, traded at its all-time high price. The last 6 weeks have seen the price move down -32%. The stock is closing below its 100 week moving average this week at $416.43. The high price in early April was $612.27.
This week both Walmart and Target disappointed and spoke to margins being hammered by higher costs. Their earnings changed the tone of the stock market and views on the economy, inflation and even the Fed (will they bite the bullet and go 100 bps). Fed’s Bullard eased some of those fears at least for now.
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