The Nasdaq will overcome the Dow
Nate Katifa | Aug 26, 2020 07:17
Perhaps the best indicator of the separation occurring in the economy is that Nasdaq has crushed the Dow Jones Industrial Average, which is composed of more traditional stocks. Through the first half of the year, the Nasdaq gained 12.1%, while the Dow lost 9.6%.
That pattern looks set to continue in the second half of the year as the conditions that favor tech stocks -- a pandemic pushing people to work from home, shop online, and avoid social gatherings as well as spending on things like restaurants and travel -- haven't changed.
Meanwhile, a number of Dow stocks are particularly vulnerable to the pandemic, such as McDonald’s (NYSE:MCD), Nike (NYSE:NKE), Disney (NYSE:DIS), and Boeing (NYSE:BA), and their results are likely to be ugly in the second half of the year.
Energy components like ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX) also look weak with oil prices still low, and financials like JPMorganChase (NYSE:JPM) and Goldman Sachs (NYSE:GS) could sink as the Federal Reserve recently warned that the 34 biggest banks could suffer as much as $700 billion in losses under a worst-case scenario.
Get The App
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.