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Category: Dow Jones, Nasdaq and S&P 500
Date: 12 September 2020 We take a look at the performance of the Dow Jones, Nasdaq and S&P 500 for the week ending 11 September 2020. The week saw the Nasdaq again underperforming against the Dow and S&P500 as continued sector rotation out of expensive tech stocks took place.
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We have been calling for a market correction for a while. And we are hoping that the negative trading week is the start of a market correction. We define a market correction as a decline of more than -10%."
Dow Jones, Nasdaq and S&P 500 recorded a modestly down week (8 September to 11 September)
The image below shows the returns of the Dow Jones (DJIA), Nasdaq and S&P 500 over the last week (8 September 2020 to 11 September 2020). All three major US indices ended the week in the red.
In our recent studies and other week ending performance articles the Nasdaq and S&P 500 tended to outperform the Dow Jones and the S&P 500. However for the week ending 11 September 2020 the Dow was the best performer while the Nasdaq was the worst performer (again). The Nasdaq is loaded with tech giants and the recent sector rotation out of tech stocks has hit the Nasdaq harder than the other major US indices.
Below the returns of the main market indices over the last week, 8 September to 11 September 2020 (sorted from best performer to worst performer)
We have been calling for a market correction for a while. And we are hoping that the negative trading week is the start of a market correction. We define a market correction as a decline of more than -10%. Market corrections is a healthy part of market behaviour and it helps in shaking out speculators out of the market as they tend to sell positions as soon as they smell trouble. So corrections remove speculators from the market and gets rid of stock bubbles.
Below the returns of the main market indices over the last week, 8 September to 11 September 2020 (sorted from best performer to worst performer)
- Dow Jones:-1.66%
- S&P 500: -2.51%
- Nasdaq: -4.07%
We have been calling for a market correction for a while. And we are hoping that the negative trading week is the start of a market correction. We define a market correction as a decline of more than -10%. Market corrections is a healthy part of market behaviour and it helps in shaking out speculators out of the market as they tend to sell positions as soon as they smell trouble. So corrections remove speculators from the market and gets rid of stock bubbles.
So lets take a look at some of the major market events during the last week
11 September 2020: The Dow ended the day up 0.48%
Dow Jones Updates:
(03:42 ET): Dow Jones futures are currently trading up by 0.66%
Website Updates:
We covered the latest earnings report of Lululemon (LULU) earlier today. Below a short extract
Based on Lululemon's 2nd quarter 2020 earnings report from Lululemon what do we value their stock at? Based on Lululemon's earnings reported our valuation model provides a target price (full value price) of $162.60 a Lululemon stock (up slightly from our 1st quarter 2020 earnings report valuation of Lululemon).
We therefore believe that the stock of Lululemon is overvalued. We usually recommend that long term fundamental and value investors look to enter a stock at least 10% below our target price which in this case is $162.60. A good entry point into Lululemon would therefore be at $146.40 or below. Since the stock of Lululemon is trading at well above our target price we rate the stock of Lululemon as avoid.
We expect it to pull back strongly from current levels to levels closer to our target price in coming weeks and months.
Read the full article here
10 September 2020: The Dow Jones ended the day down -1.45%
Dow Jones Updates:
Website Updates:
We covered the latest earnings report of Norwegian Cruise Line Holdings (NCLH)
Based on Norwegian Cruise Line Holdings latest earnings reports what do we value their stock at? Based on the earnings reported and the fact that the group is currently loss making and will be into the foreseeable future we value Norwegian Cruise Line Holdings stock at $39.20 a stock. Sure they in a tough spot now. But travel will recover, they will operate again and the good times will be back.
We therefore believe that stock of Norwegian Cruise Line Holdings is undervalued.
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target price which in this case is $39.20. We therefore believe a good entry point into the stock of Norwegian Cruise Line Holdings is at $35.30 or below.
Since the stock of Norwegian Cruise Line Holdings is trading at well below our recommended entry point into the stock we rate the stock of Norwegian Cruise Line Holdings as a buy. But this call is only for investors willing to sit on the stock for a prolonged period and wait for the Coronavirus to pass, which could be a while. But we believe the strong drop in Norwegian Cruise Line Holdings stock in recent weeks has created a good buying opportunity for those looking for quality assets at depressed prices.
Read the full article here
9 September 2020: The Dow ended the day up by 1.6%
Dow Jones Updates:
Website Updates:
Earlier we compared the performance of the Nasdaq to that of the S&P500 and the Dow Jones over time. Below a short extract from that article
So while the Nasdaq has been under performing the Dow Jones and the S&P500 over the very recent past. It has still easily outperformed the Dow Jones and the S&P500 over the last year, 5 years and 10 year period. Over the last 10 years the Nasdaq has provided a return of 352.4%, the S&P 500 has provided 184.8% and the Dow Jones 153.3%. So basically the Nasdaq has provided over double the returns of the Dow Jones over the last 10 years. So while over the shorter term the tech heavy Nasdaq is declining faster than the Dow Jones and the S&P500 it has easily outperformed them due to the very fact that it is tech heavy as tech stocks has had a very good decade.
Read the full article here
8 September 2020: The Dow ended the day down by -2.25%
Dow Jones Updates:
(13:00 ET): Dow Jones is currently trading down by -1.4%
(09:49 ET): Dow Jones is currently trading down by -2.04%
(08:24 ET): Dow Jones futures are currently trading down by -0.54%
(02:33 ET): Dow Jones futures are currently trading up by 1.03%
Website Updates:
We covered the latest earnings report of Broadcom (AVGO) yesterday. Below a short extract from that article
So based on Broadcom's latest earnings report what do we value their stock at? Based on their 3rd quarter 2020 earnings report our valuation model provides a target price of $345.60 per Broadcom (AVGO) stock. We therefore believe that the stock of Broadcom is fully valued at its current price
We usually recommend that long term and value investors look to enter a stock at least 10% below our target price. A good entry into the stock of Broadcom would therefore be at $311 or below.
Since the stock of Broadcom is trading at very close to our target price we rate the stock of Broadcom (AVGO) as a hold
Read the full article here
Dow Jones Updates:
(03:42 ET): Dow Jones futures are currently trading up by 0.66%
Website Updates:
We covered the latest earnings report of Lululemon (LULU) earlier today. Below a short extract
Based on Lululemon's 2nd quarter 2020 earnings report from Lululemon what do we value their stock at? Based on Lululemon's earnings reported our valuation model provides a target price (full value price) of $162.60 a Lululemon stock (up slightly from our 1st quarter 2020 earnings report valuation of Lululemon).
We therefore believe that the stock of Lululemon is overvalued. We usually recommend that long term fundamental and value investors look to enter a stock at least 10% below our target price which in this case is $162.60. A good entry point into Lululemon would therefore be at $146.40 or below. Since the stock of Lululemon is trading at well above our target price we rate the stock of Lululemon as avoid.
We expect it to pull back strongly from current levels to levels closer to our target price in coming weeks and months.
Read the full article here
10 September 2020: The Dow Jones ended the day down -1.45%
Dow Jones Updates:
- (08:06 ET): Dow Jones futures are currently trading down by -0.47%
- (0:34 ET): Dow Jones futures are currently trading down by -0.26%
Website Updates:
We covered the latest earnings report of Norwegian Cruise Line Holdings (NCLH)
Based on Norwegian Cruise Line Holdings latest earnings reports what do we value their stock at? Based on the earnings reported and the fact that the group is currently loss making and will be into the foreseeable future we value Norwegian Cruise Line Holdings stock at $39.20 a stock. Sure they in a tough spot now. But travel will recover, they will operate again and the good times will be back.
We therefore believe that stock of Norwegian Cruise Line Holdings is undervalued.
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target price which in this case is $39.20. We therefore believe a good entry point into the stock of Norwegian Cruise Line Holdings is at $35.30 or below.
Since the stock of Norwegian Cruise Line Holdings is trading at well below our recommended entry point into the stock we rate the stock of Norwegian Cruise Line Holdings as a buy. But this call is only for investors willing to sit on the stock for a prolonged period and wait for the Coronavirus to pass, which could be a while. But we believe the strong drop in Norwegian Cruise Line Holdings stock in recent weeks has created a good buying opportunity for those looking for quality assets at depressed prices.
Read the full article here
9 September 2020: The Dow ended the day up by 1.6%
Dow Jones Updates:
- (8:15 ET): Dow Jones futures are currently trading up by 0.37%
- (01:04 ET): Dow Jones futures are currently trading up by 0.08%
Website Updates:
Earlier we compared the performance of the Nasdaq to that of the S&P500 and the Dow Jones over time. Below a short extract from that article
So while the Nasdaq has been under performing the Dow Jones and the S&P500 over the very recent past. It has still easily outperformed the Dow Jones and the S&P500 over the last year, 5 years and 10 year period. Over the last 10 years the Nasdaq has provided a return of 352.4%, the S&P 500 has provided 184.8% and the Dow Jones 153.3%. So basically the Nasdaq has provided over double the returns of the Dow Jones over the last 10 years. So while over the shorter term the tech heavy Nasdaq is declining faster than the Dow Jones and the S&P500 it has easily outperformed them due to the very fact that it is tech heavy as tech stocks has had a very good decade.
Read the full article here
8 September 2020: The Dow ended the day down by -2.25%
Dow Jones Updates:
(13:00 ET): Dow Jones is currently trading down by -1.4%
(09:49 ET): Dow Jones is currently trading down by -2.04%
(08:24 ET): Dow Jones futures are currently trading down by -0.54%
(02:33 ET): Dow Jones futures are currently trading up by 1.03%
Website Updates:
We covered the latest earnings report of Broadcom (AVGO) yesterday. Below a short extract from that article
So based on Broadcom's latest earnings report what do we value their stock at? Based on their 3rd quarter 2020 earnings report our valuation model provides a target price of $345.60 per Broadcom (AVGO) stock. We therefore believe that the stock of Broadcom is fully valued at its current price
We usually recommend that long term and value investors look to enter a stock at least 10% below our target price. A good entry into the stock of Broadcom would therefore be at $311 or below.
Since the stock of Broadcom is trading at very close to our target price we rate the stock of Broadcom (AVGO) as a hold
Read the full article here
Chart of the Dow Jones Industrial Average (DJIA) vs Nasdaq vs S&P500 over last 10 years
The graphic below shows the performance of the Dow Jones Industrial Average (DJIA) index over the last month. As soon as a user clicks on the Nasdaq or S&P500 the graphic recalculates and shows the returns of the additional indices selected. The graphic will recalculate the returns if users provide their own dates, within the last 10 year (or they can select predefined dates from our Zoom box in the graphic). Data for the graphic obtained from MacroTrends.Net
Below the returns of the main market indices over the last 12 months (sorted from best performer to worst performer)
So from the above its is clear that the Nasdaq has easily outperformed other major indices such as the S&P 500 and The Dow Jones over the last 12 months. The same can be said about the 2 year performance, 3 year performance, 5 year performance and 10 year performance, as tech giants listed on the Nasdaq has been driving the performance of the Nasdaq.
Below a summary of the returns provided by the three major US stock market indices over the last 10 years:
- Nasdaq: 33.7%
- S&P 500: 11.6%
- Dow Jones (DJIA): 2.71%
So from the above its is clear that the Nasdaq has easily outperformed other major indices such as the S&P 500 and The Dow Jones over the last 12 months. The same can be said about the 2 year performance, 3 year performance, 5 year performance and 10 year performance, as tech giants listed on the Nasdaq has been driving the performance of the Nasdaq.
Below a summary of the returns provided by the three major US stock market indices over the last 10 years:
- Nasdaq: 352.6%
- S&P 500: 185.6%
- Dow Jones (DJIA): 154.8%