The Nasdaq Composite kissed its worst bear market in 14 years goodbye.
Wednesday, the tech-heavy composite gained 2.9% closing at 12,854.80, officially entering a new bull market, as tracked by Dow Jones Market Data Group. The gains were fueled, in part, by a slight easing of inflation which rose 8.5% in July, down from June’s 9.1%. Still, prices remain near 40-year highs and an overhang on the economy.
INSIDE JULY’S LATEST INFLATION REPORT
Ticker Security Last Change Change % I:COMP NASDAQ COMPOSITE INDEX 12854.804732 +360.88 +2.89%
“If inflation continues to drop, the bull-steepening trade will gain further momentum. The Nasdaq has just rallied 20% in 55 days, which is making a lot of traders abandon the idea that this is a bear market rally” wrote Edward Moya, senior market analyst, The Americas OANDA.
FACEBOOK’S META DEFENDS ACTION WITH COPS DURING INVESTIGATION
Bank of America’s institutional clients continued to pile into tech and communication stocks with inflows hitting the most on record last week, $3.3 billion, as noted by the team led by Jill Carey Hall, Equity & Quant Strategist, BofA.
Despite July’s consumer price index pullback, several economists, including former Treasury Secretary Larry Summers, continue to sound the alarm on inflation.
“I still think we have a very serious inflation problem in this country. I don’t think that inflation problem is going to go away of its own volition. And so I think we’re likely to have some quite turbulent times ahead” he said during an interview on MSNBC following the report.
Despite the gains, the Nasdaq is still off about 20% from its all-time high of 16,057.44 reached in November 2021.
“We see risk that Tech may not prove to be as defensive as some investors expect; Nasdaq earnings revisions have continued to lag S&P 500 earnings revisions” Carey’s team cautioned.