Nasdaq 100 Versus 2000 Dot Com Peak
The Tech-heavy Nasdaq 100 is up more than 20% year-to-date, and as shown in the chart below, the index is now 24.8% above its Dot Com bubble peak hit on March 27th, 2000. In the mid to late 2000s, there were plenty of investors that thought they wouldn’t live to see the Nasdaq take out its Tech-bubble highs, but the index’s surge over the last year has made it a reality.
While the Nasdaq 100’s chart looks pretty gorgeous right now, we can’t help but wonder when the next downturn will come. Remember, stocks do go down sometimes!
Since 1990, the Nasdaq 100 is up nearly 5x as much as the S&P 500 in terms of simple price appreciation. Talk about outperformance.
Below is a look at the best and worst performers in the Nasdaq 100 (current members) since the Dot Com peak on March 27th, 2000. One fifth of the index is up more than 1,000% since those prior highs, including names like Apple (AAPL), NVIDIA (NVDA), Amazon.com (AMZN), and Starbucks (SBUX).
Even more interesting to us is that 15 stocks in the index still haven’t taken out their Dot Com bubble highs. Stocks like Cisco (CSCO), Yahoo! (YHOO), and Intel (INTC) are all still 50%+ below their 3/27/00 price levels.
Non Farm Payrolls: An Outlier for May Employment Data
Leading up to each month’s Non-Farm Payrolls (NFP) report, we always like to look at a variety of secondary employment-related indicators for a sign of what we might be able to expect from the main report. Because this month’s payrolls report fell on the second day of the month, a number of the secondary indicators weren’t released until after the actual report. However, in the accompanying table, we put together a compilation of them to show how they changed between April and May.
After last Friday’s NFP report, we came across a number of stories suggesting that the miss in headline Non-Farm Payrolls was leading to skepticism on the part of investors regarding additional rate hikes following a widely expected hike in June. According to a Bloomberg story, “investors increasingly doubt the central bank’s projection for additional hikes following soft reports on U.S. employment and inflation.” What was puzzling about this line of reasoning was that despite the weaker than expected headline reading in Non-Farm Payrolls, every other indicator we tracked in our table to the right was either inline with or ahead of expectations. Additionally, in the cases of ADP Private Payrolls and the Employment component of the ISM Services report, the margin of upside surprise was actually quite strong. In fact, in May’s ISM Services report, the Employment component printed its fifth highest level in the history of the report (since 1997) and the best single month in nearly two years (July 2015). Yes, NFP was on the weak side, but with every other indicator coming in inline or to the upside, it’s hard to call the labor market soft. Also, keep in mind that this table didn’t include the most recentl JOLTS report for April which hit an all-time high.
Bespoke Summary of Economic Indicators: 6/7/17
Chart of the Day: Economic Indicator Diffusion Index Trying to Stabilize
Fixed Income Weekly – 6/7/17
Searching for ways to better understand the fixed income space or looking for actionable ideals in this asset class? Bespoke’s Fixed Income Weekly provides an update on rates and credit every Wednesday. We start off with a fresh piece of analysis driven by what’s in the headlines or driving the market in a given week. We then provide charts of how US Treasury futures and rates are trading, before moving on to a summary of recent fixed income ETF performance, short-term interest rates including money market funds, and a trade idea. We summarize changes and recent developments for a variety of yield curves (UST, bund, Eurodollar, US breakeven inflation and Bespoke’s Global Yield Curve) before finishing with a review of recent UST yield curve changes, spread changes for major credit products and international bonds, and 1 year return profiles for a cross section of the fixed income world.
In this week’s note, we discuss the move lower in ten year yields as a function of the market’s expectation for Fed policy.
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ETF Trends: US Indices & Styles – 6/7/17
Gold miners have spiked over the last week, outperforming all other ETFs we tracking. Oil, on the other hand, continues to get hit hard with USO, DBE, and DBO all on top of our worst performers list. Huge builds in inventories and products in today’s EIA report on the US petroleum market are helping the cause. Other good performers of late have included Mexico, Japan, biotech, and some small cap indices. Commodities in general continue to underperform; base metals, broad commodity indices, and natural gas.
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Bespoke CNBC Appearance (6/7/17)
Bespoke co-founder Paul Hickey appeared on CNBC’s Squawk Box today to discuss markets, the FOMC, and the jobs market. To view the segment, please click on the link below.
Bespokecast Episode 12 — Marc Cohodes — Now Available on iTunes, GooglePlay, Stitcher and More
We’re happy to announce that the newest episode of Bespokecast is now available to the general public both here and via the various podcast platforms. Be sure to subscribe to Bespokecast on your preferred podcast app to gain access to our full collection of episodes. We’d also love for you to provide a review as well!
In our newest conversation on Bespokecast, we sit down with short seller Marc Cohodes. Marc manages his portfolio from San Francisco, and has had great success with high profile bear cases focused on frauds, fads, and failures in recent years. His investment industry experience dates to the early 1980s, and has helped him hone his process for picking out companies unlikely to succeed. Marc goes into detail on his approach, including how he thinks about finding potential shorts, timing, and risk management. He discusses with us recent successful shorts including Valeant, Concordia, and Home Capital Group, as well as another new bear case he has been building a position in Badger Daylight. You can read more about Badger at Marc’s website discussing the company. Marc is the first short seller we’ve had on Bespokecast, and we learned a ton about his approach to the market. We hope you do too!
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The Closer — Labor Markets Strong, Dollar Rates Less So — 6/6/17
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Looking for deeper insight on global markets and economics? In tonight’s Closer sent to Bespoke Institutional clients, we dive into the Job Openings and Labor Turnover Survey (JOLTS) updated today by the BLS. We also take a look at the fresh lows in the dollar and the ten year yield while the Nasdaq reaches an extreme overbought level on a weekly basis.
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