Nasdaq ETFs In Focus As The Index Touches 15-Year Highs
Zacks Investment Research | Mar 24, 2015 01:51AM ET
With U.S. economic growth at an 11-year high and job growth at the best phase since 1999, it makes sense to ride out the amazing growth momentum. While several corners of the market are presently offering opportunities, a specific benchmark, the NASDAQ, is expected to be on fire as we progress into 2015. This is the second-largest U.S. and global stock exchange by market cap and trading volume.
The index closed above the 5,000 mark for the first time in early March since the dot-com boom took the technology sector by storm in March 2000. This is especially true as the index is heavy on the technology sector. Investors should note that when the U.S. economy shifts gear from recession to recovery, economically sensitive sectors like Information Technology gains momentum. Per Fidelity, greater consumer optimism and a pickup in corporate spending normally boosts tech stocks and in turn reinforce the outlook of industries like semiconductors.
This is exactly what is happening in the current U.S. economic backdrop. The Zacks Earnings Trend shows that technology sector came up with an earnings beat ratio of 64.5% and revenue beat ratio of 48.4% in Q4. Tech earnings witnessed an about 13.5% jump in the quarter with an expected 7.2% rise in 2015 and 11.4% in 2016, as per the Zacks Earnings Trend.
The story is much sweeter when it comes to revenue growth. We have seen tech stocks posting 7.9% expansion in Q4 of 2014 with an expected 5% rise in both 2015 and 2016. The performance was notably better than what we saw from the same group of companies in other recent quarters. Needless to say, this bullish tech outlook should have a palpable impact on the NASDAQ.
In fact, the tech-laden Nasdaq Composite Index gained about 14% in 2014 which was the best performing market index of the year. Not only this, the index Original post
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