Ahhhh…
You’ve got to love a rally.
And nothing warms the heart of Wall Street quite like a record-breaking rally…
Which is something that the Nasdaq just gave investors as an early Christmas gift.
How big of a gift?
Well, recently, the tech-heavy index hit a major milestone – opening above 20,000 for the first time in history.
The mood? Euphoric…
Fueled by booming tech stocks, AI-mania and whispers of another interest rate cut – the Nasdaq is putting on a show that’s hard to ignore.
How long will this show go on?
Who knows…
But I can tell you one thing – investors are definitely here for it!
However, before we start speculating about when this thing’s going to go off the rails…
Let’s talk about what’s driving it.
Every rally has to have been sparked by something, right?
Well, this rally is NO different.
While, yes, the Nasdaq has been on fire this year – climbing an impressive 33% year-to-date…
Several factors are stoking the flames:
· AI Boom: Artificial intelligence continues to be the buzzword of the year – with investors piling into tech stocks that stand to benefit from the revolution. Companies like Nvidia (NVDA) and Microsoft (MSFT) are among the biggest winners, helping to propel the index to new highs.
· Economic Optimism: A resilient US economy – despite inflationary pressures – has reassured investors that a recession isn’t lurking around the corner.
· Rate Cut Expectations: Speculation about another interest rate cut coming soon (maybe even by the time you read this) is adding fuel to the rally. Lower borrowing costs generally encourage spending and investment – which bodes well for corporate profits and, by extension, stock prices.
It’s the perfect cocktail of market forces – that’s just in time for the holidays.
And let’s not forget the “wealth effect:” rising stock markets make people feel richer – boosting confidence and encouraging spending.
In other words: higher Nasdaq = more people splurging on gifts and goodies.
So, where are people turning to take advantage of all this spending?
Well, it seems there’s been a very lucrative target – ETFs.
Exchange-traded funds (ETFs) tracking major indexes like the Nasdaq and S&P 500 are perennial investor favorites – with over $2 trillion in assets under management.
These ETFs are often top-heavy, loaded with shares of the Magnificent Seven (like Apple-AAPL, Amazon-AMZN, Alphabet-GOOGL and the rest).
That means when the Nasdaq rallies, these stocks tend to get a boost – reinforcing the cycle of growth.
But it’s not just ETFs driving the action…
Individual stocks are getting their moment in the spotlight too.
Recently, Google (Alphabet) stole the show – soaring 5% after unveiling its latest quantum computing chip…
That far outpaced the Nasdaq’s 1.8% gain – proving that even in a strong market – stock pickers can still find opportunities to outperform.
This is especially true right now because US stocks have been running hot. – with valuations that some might call “decadent.”
The Nasdaq’s rally has been especially sharp – driven by strong price momentum – which often signals a good time to buy…
But there’s a flipside: if ETF selling picks up – or if rate cuts fail to materialize – the market could lose its luster – and you know what that means, right?
Momentum can turn on a dime – turning today’s winners into tomorrow’s losers.
But for now, the Nasdaq’s climb is giving investors plenty to cheer about – let’s ride this out before we start getting too negative.
Too often, investors start looking for ways to mitigate any potential loss before there’s even one drop of blood in the streets…
They panic – because they don’t know.
GorillaTrades members NEVER panic.
Do you know why?
Because they know that any recommendation they get from us is based on numbers and data – not speculation.
If we send out a buy or sell alert – it’s because the numbers told us the REAL story…
Not because some guy overheard two other guys talking in a bar.
If you’re looking for more certainty out of your investing – you might want to consider joining GorillaTrades today
For over 25 years– we’ve given our members the ability to make a LOT of money…
Not because we’re smarter or better than everybody else – we just know that the truth lies in data and data alone.
If you want to be there to get that chance that thousands of others have gotten over the years – please join today.
Of course, we realize that some people love to go it alone. We respect that – but if you’re tired of trying to figure it out on your own…
Give us a shot.
Either way, enjoy this rally while it lasts…
It’s better to ride the wave than get buried by it.
“Bull-markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” – John Templeton
