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Category: Dow Jones, Nasdaq and S&P 500
Date: 8 August 2020 We take a look at the performance of the Dow Jones, Nasdaq and S&P 500 for the week ending 7 August 2020. It was a very positive week for all three major US market indices. In the week that ended Walt Disney (DIS) reported a -42% in their revenues and a loss of $4.7 billion for their latest earnings quarter.
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In what seems to be a return to normalcy in that the Nasdaq has outperformed the S&P 500 and Dow Jones. This is largely due to the fact that a large number of tech heavy weights reported earnings during the week."
Dow Jones, Nasdaq and S&P 500 recorded mixed returns for the week ending 7 August 2020
The image below shows the returns of the Dow Jones (DJIA), Nasdaq and S&P 500 over the last week (3 August 2020 to 7 August 2020).
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 7 August 2020 the Dow was the best performer while the Nasdaq was the worst performer.
Below the returns of the main market indices over the last week, 3 August 2020 to 7 August 2020 (sorted from best performer to worst performer)
We are however surprised at the current strength of the financial markets considering the fact that there is an alarming spike in the number of coronavirus cases in the the United States. This will have a negative impact on businesses, consumers and the health care sector in general. However the tech stocks reported earnings this week and they all reported very solid results.
Below the returns of the main market indices over the last week, 3 August 2020 to 7 August 2020 (sorted from best performer to worst performer)
- Dow Jones: 3.80%
- Nasdaq: 2.47%
- S&P 500: 2.45%
We are however surprised at the current strength of the financial markets considering the fact that there is an alarming spike in the number of coronavirus cases in the the United States. This will have a negative impact on businesses, consumers and the health care sector in general. However the tech stocks reported earnings this week and they all reported very solid results.
So lets take a look at some of the major market events during the last week
7 August: The Dow Jones ended the day up by 0.17%
Dow Jones Updates:
(06:55 ET): Dow Jones futures are currently trading down at -0.22%
(01:00 ET): Dow Jones futures are currently trading down at -0.36%
Website Updates:
Yesterday we looked at the stockholders equity per share of Berkshire Hathaway (BRKA). The summary below shows the stockholders equity and stockholders equity per share of Berkshire Hathaway (BRKA) for December 2019 and March 2020. Over the period the stockholders equity of Berkshire Hathaway declined by -12.4%
March 2020 December 2019
Total shareholders’ equity: $375.235 billion $428.563 billion
Total stockholders equity per share: $231 626 $261 438
Read the full article here
6 August 2020: The Dow Jones ended the day higher by 0.68%
Dow Jones updates:
(01:11 ET): Dow futures are currently trading up by 0.16%
Website updates:
Yesterday we asked whether its a good time to buy the stock of Apple (APPL)
Is this a good time to buy the stock of Apple (APPL)? The short simple answer to this question is absolutely.. NOT. Its overvalued and if you buying into the stock now you run the risk of significant losses should the stock price correction takes place to bring it back to more realistic valuations.
Read the full article here
5 August 2020: The Dow Jones ended the day up by 1.39%
Dow Jones updates:
(11:28ET): The Dow is currently trading up by 1.24%
(06:44 ET): Dow futures are currently trading up by 0.72%
(01:27 ET): Dow futures are currently trading up by 0.12%
Website updates:
Yesterday we covered the market capital of the 10 biggest stocks on the NASDAQ and compared it to the total market capital of the Dow Jones. Below an extract of the article.
Market Capital of the 10 largest Nasdaq listed firms (including Microsoft (MSFT), Apple (APPL), Cisco (CSCO) and Intel which is part of the Dow Jones)
So the top 10 stocks listed on the Nasdaq (including those included in the Dow Jones Industrial Average) total market capital amounts to $7.96 trillion, or about 98.8% of the total market capital of the Dow Jones Industrial Average (which is 30 stocks).
This just shows how the tech heavy Nasdaq is growing and becoming ever more important in the world of financial markets. Who knows, over time perhaps the Nasdaq will replace the Dow Jones as the most quoted and used major market index.
Read the full article here
4 August: The Dow ended the day up by 0.62%
Dow Jones Updates:
(15:09 ET): The Dow Jones is currently trading up by 0.35%
(06:47 ET): Dow Jones futures are currently trading down by -0.18%
(0:27 ET): Dow Jones futures are currently trading up by 0.03%
Website Updates:
We covered the latest earnings report of Dunkin' Brands. Below a short extract of that article
So what do we value Dunkin' Brands stock at after the release of their 2nd quarter 2020 earnings report? Based on Dunkin' Brands earnings report our valuation models provides a target price (full value price) of Dunkin' Brands at $46.10 a stock. We therefore believe that the stock of Dunkin' Brands is overvalued.
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $46.10 therefore we believe a good entry point into Dunkin' Brands stock is at $41.50 or below. We expect the stock of Dunkin' Brands to pull back from current levels to levels closer to our target price (full value price) in coming weeks and moths as we believe it is significantly overvalued at this point in time.
We therefore rate Dunkin' Brands as a sell
Read the full article here
3 August: The Dow Jones ended the day up by 0.89%
Dow Jones Updates:
(13:08 ET): The Dow Jones is currently trading up by 0.85%
(0:27 ET): Dow Jones futures are currently trading down by -0.21%
Website Updates:
Apple (APPL) vs Amazon (AMZN) vs Alphabet (GOOGL). Who comes out on top?
One of our key metrics is the Price to Stockholders equity per share ratio. When looking at this we find the following:
Based on this metric Alphabet offers far more value than Amazon and Apple. Most firms tend to trade at a ratio of between 2 and 4 times its stockholders equity per share. What it shows that if a firm was to be liquited now, all assets sold, liabilities paid and the rest paid out to stockholders, that amount is expressed as a ratio to the stock price.
Next up cash as percentage of stock price:
Next up lets take a look at the percentage cash on the balance sheet makes up of each group's total assets:
PE ratio:
Apple has the lowest PE ratio and Amazon by far the highest
Price/Valuation ratio: This ratio is the current stock price divided by our latest valuation price for each stock
So based on this Alphabet offers the most value right now, but its still almost 20% more than our target price, while Amazon is trading at more than double our valuation price and Apple roughly 71% our valuation price.
Read the full article here
Yesterday we covered the latest earnings report of Alphabet (GOOGL). Below a short extract of that article
So what do we value Alphabet at based on their latest earnings report, their earnings per share, cash generated from their operations and the group's future prospects. Based on Alphabet's latest earnings report our valuation model provides a target price (full value price) at $1240.20 a Alphabet stock (up slightly from our 1st quarter 2020 earnings report valuation of Alphabet). We therefore believe the stock of Alphabet is overvalued
We usually recommend that long term fundamental or value investors look to enter a stock at at least 10% below our target price, which in this case is $1240.20 so we would suggest looking to buy Alphabet at around $1116 a stock. Since the stock of Alphabet (GOOGL) is trading at well above our suggested entry point into the stock we will go against popular market and pundits opinions and rate the stock of Alphabet as a sell
Read the full article here
Dow Jones Updates:
(06:55 ET): Dow Jones futures are currently trading down at -0.22%
(01:00 ET): Dow Jones futures are currently trading down at -0.36%
Website Updates:
Yesterday we looked at the stockholders equity per share of Berkshire Hathaway (BRKA). The summary below shows the stockholders equity and stockholders equity per share of Berkshire Hathaway (BRKA) for December 2019 and March 2020. Over the period the stockholders equity of Berkshire Hathaway declined by -12.4%
March 2020 December 2019
Total shareholders’ equity: $375.235 billion $428.563 billion
Total stockholders equity per share: $231 626 $261 438
Read the full article here
6 August 2020: The Dow Jones ended the day higher by 0.68%
Dow Jones updates:
(01:11 ET): Dow futures are currently trading up by 0.16%
Website updates:
Yesterday we asked whether its a good time to buy the stock of Apple (APPL)
Is this a good time to buy the stock of Apple (APPL)? The short simple answer to this question is absolutely.. NOT. Its overvalued and if you buying into the stock now you run the risk of significant losses should the stock price correction takes place to bring it back to more realistic valuations.
Read the full article here
5 August 2020: The Dow Jones ended the day up by 1.39%
Dow Jones updates:
(11:28ET): The Dow is currently trading up by 1.24%
(06:44 ET): Dow futures are currently trading up by 0.72%
(01:27 ET): Dow futures are currently trading up by 0.12%
Website updates:
Yesterday we covered the market capital of the 10 biggest stocks on the NASDAQ and compared it to the total market capital of the Dow Jones. Below an extract of the article.
Market Capital of the 10 largest Nasdaq listed firms (including Microsoft (MSFT), Apple (APPL), Cisco (CSCO) and Intel which is part of the Dow Jones)
- Apple: $1.89 trillion
- Microsoft: $1.64 trillion
- Amazon: $1.56 trillion
- Alphabet: $1.01 trillion
- Facebook: $718.4 billion
- Nvidia: $270.9 billion
- Paypal: $231.4 billion
- Netflix: $219.9 billion
- Adobe: $214.9 billion
- Intel: $205.4 billion
So the top 10 stocks listed on the Nasdaq (including those included in the Dow Jones Industrial Average) total market capital amounts to $7.96 trillion, or about 98.8% of the total market capital of the Dow Jones Industrial Average (which is 30 stocks).
This just shows how the tech heavy Nasdaq is growing and becoming ever more important in the world of financial markets. Who knows, over time perhaps the Nasdaq will replace the Dow Jones as the most quoted and used major market index.
Read the full article here
4 August: The Dow ended the day up by 0.62%
Dow Jones Updates:
(15:09 ET): The Dow Jones is currently trading up by 0.35%
(06:47 ET): Dow Jones futures are currently trading down by -0.18%
(0:27 ET): Dow Jones futures are currently trading up by 0.03%
Website Updates:
We covered the latest earnings report of Dunkin' Brands. Below a short extract of that article
So what do we value Dunkin' Brands stock at after the release of their 2nd quarter 2020 earnings report? Based on Dunkin' Brands earnings report our valuation models provides a target price (full value price) of Dunkin' Brands at $46.10 a stock. We therefore believe that the stock of Dunkin' Brands is overvalued.
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $46.10 therefore we believe a good entry point into Dunkin' Brands stock is at $41.50 or below. We expect the stock of Dunkin' Brands to pull back from current levels to levels closer to our target price (full value price) in coming weeks and moths as we believe it is significantly overvalued at this point in time.
We therefore rate Dunkin' Brands as a sell
Read the full article here
3 August: The Dow Jones ended the day up by 0.89%
Dow Jones Updates:
(13:08 ET): The Dow Jones is currently trading up by 0.85%
(0:27 ET): Dow Jones futures are currently trading down by -0.21%
Website Updates:
Apple (APPL) vs Amazon (AMZN) vs Alphabet (GOOGL). Who comes out on top?
One of our key metrics is the Price to Stockholders equity per share ratio. When looking at this we find the following:
- Price/Stockholders equity per share for Alphabet: 5.05
- Price/Stockholders equity per share for Amazon : 21.2
- Price/Stockholders equity per share for Apple : 23.2
Based on this metric Alphabet offers far more value than Amazon and Apple. Most firms tend to trade at a ratio of between 2 and 4 times its stockholders equity per share. What it shows that if a firm was to be liquited now, all assets sold, liabilities paid and the rest paid out to stockholders, that amount is expressed as a ratio to the stock price.
Next up cash as percentage of stock price:
- Cash as percentage of stock price for Alphabet: 1.7%
- Cash as percentage of stock price for Amazon: 2.4%
- Cash as percentage of stock price for Apple: 1.9%
Next up lets take a look at the percentage cash on the balance sheet makes up of each group's total assets:
- Cash as percentage of stock price for Alphabet: 6.4%
- Cash as percentage of stock price for Amazon: 16.02%
- Cash as percentage of stock price for Apple: 10.5%
PE ratio:
- PE ratio of Alphabet: 35.6
- PE ratio of Amazon: 76.3
- PE ratio of Apple: 28.2
Apple has the lowest PE ratio and Amazon by far the highest
Price/Valuation ratio: This ratio is the current stock price divided by our latest valuation price for each stock
- Price/Valuation ratio of Alphabet: 1.19
- Price/Valuation ratio of Amazon: 2.13
- Price/Valuation ratio of Apple: 1.71
So based on this Alphabet offers the most value right now, but its still almost 20% more than our target price, while Amazon is trading at more than double our valuation price and Apple roughly 71% our valuation price.
Read the full article here
Yesterday we covered the latest earnings report of Alphabet (GOOGL). Below a short extract of that article
So what do we value Alphabet at based on their latest earnings report, their earnings per share, cash generated from their operations and the group's future prospects. Based on Alphabet's latest earnings report our valuation model provides a target price (full value price) at $1240.20 a Alphabet stock (up slightly from our 1st quarter 2020 earnings report valuation of Alphabet). We therefore believe the stock of Alphabet is overvalued
We usually recommend that long term fundamental or value investors look to enter a stock at at least 10% below our target price, which in this case is $1240.20 so we would suggest looking to buy Alphabet at around $1116 a stock. Since the stock of Alphabet (GOOGL) is trading at well above our suggested entry point into the stock we will go against popular market and pundits opinions and rate the stock of Alphabet as a sell
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: 39.4%
- S&P 500: 16%
- Dow Jones (DJIA): 5.98%
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: 359.1%
- S&P 500: 186.6%
- Dow Jones (DJIA): 152.7%