It’s not been a good month for the NASDAQ-100, or any stocks in general. But you don’t need us to tell you that. Unless you’ve been living under a rock for most of 2020, you’ll know that after a high of 9718.73 in late February, the NASDAQ-100, or NASDAQ composite proceeded to tumble to 8436.67 by the end of February, make a small recovery, then plummet again to record lows of 6994.29 in late March.
Of course, this unprecedented drop is all the work of coronavirus, or more specifically, its effect on businesses. As workers from the technology, manufacturing and telecommunications companies listed in the NASDAQ-100 were sent home, production ceased and stocks, unsurprisingly, dropped in value as brokers began panic selling.
The Past Week
Considering how bad it was earlier in March, the NASDAQ posted a relatively high result on Monday 30th March at 7889.01, a 12.5% increase from the previous Monday, but this growth quickly diminished again, falling to 7445.88 on Thursday morning. Much of this can be owed to coronavirus hitting New York City harder than almost anywhere else in the world, with the city having some of the strictest lockdown measures seen anywhere due to that. NASDAQ brokers on Wall Street were no exception to these measures, and were feeling quite uncertain about the future.
Around the world, there was a similar picture. In Asia, Hong Kong’s Hang Seng index crept up by 0.84% and now sits at 23,280.06; Japan had a fourth day of continuous losses, ending with the Nikkei average falling 246.69 points to 17,818.72, whilst the more-encompassing Topix index closed at 1.57% less, to arrive at 1,329.87, and finally China’s Shanghai Composite index rose by 1.69%, to 2,780.64.
Over in Australia the benchmark S&P/ASX 200 dropped 104.30 points, to 5,154.30, and the All Ordinaries index ended with 102 points less, at 5,188.70.
However, in Europe, there are definite signs of improvement: the Euro Stoxx 50 Index, which is an amalgamation of 50 blue chip stocks across the eurozone gained 0.31%. Individual European countries showed positive signs too: the German DAX increased by 31.72 points or 0.33%; the CAC 40 Index of France gained 34.30 points or 0.82% and the U.K. FTSE 100 Index climbed 36.82 points or 0.66%.
By Friday, things had started to turn around once more in the US. The Dow Jones futures rose 1.79% higher to 21011, S&P 500 futures climbed 1.64% higher to 2488 and, of course, NASDAQ-100 futures were 1.15% higher at 7524.
This Week
By close of play on Monday, 6th April, the NASDAQ-100 had reached above 8000 points, bursting through the metaphorical ceiling that many didn’t believe was possible after the previous week. Some forecasters even predicted highs of up to 8500 on the horizon. The smart money says that the NASDAQ will hover around in the 7000-8000 point range for a while as a period of relative calm begins in New York.
The number of cases of novel coronavirus have begun to level out in the city, and whilst the ordeal is certainly not over, it would seem that there is now a small glimmer of light at the end of what looked to be a very long, dark tunnel: the results of treatment trials taking place in NY have yet to be revealed, but President Trump has apparently ordered the stockpiling of 29 million of the Hydroxychloroquine pills used in the trials, which suggests that they must have been effective.
The Future
The NASDAQ-100 is somewhat protected from the very worst effects of the coronavirus, as many of the businesses in the index do business in the ‘work from home’ space. Google’s parent company, Alphabet, along with Microsoft and Adobe have invested heavily in cloud-based working solutions for years. They may not necessarily have seen something like COVID-19 on the horizon, but they certainly know the importance of being able to access work wherever you are, and as such, they may be able to pull through this period relatively unscathed. How the NASDAQ will fare longer-term is yet to be seen, but a steady hand on the wheel on Wall Street is bound to bring some confidence back to the market.
