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Category: Dow Jones, Nasdaq and S&P 500
Date: 1 September 2020 We compare the performance of the tech heavy Nasdaq to the Dow Jones Industrial Average and the S&P 500 over time and find that the Nasdaq has easily outperformed the other major stock market indices over most time periods looked at up to the end of August 2020. We believe the tech heavy NASDAQ is overvalued as some of its largest constituents are trading at very lofty valuations.
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We are however surprised at the current strength of the financial markets considering the current and future impact of coronavirus cases in the the United States."
Dow Jones, Nasdaq and S&P 500 performance for the last week (25 August to 31 August)
The image below shows the returns of the Dow Jones (DJIA), Nasdaq and S&P 500 over the last week (25 August 2020 to 31 August 2020). And as per the normal run of the markets in recent years, the Nasdaq has outperformed the Dow Jones and the S&P 500.
Graph of the Dow Jones, Nasdaq and S&P 500 performance for the week ending 31 August 2020
As the image above shows over the last week (5 trading days) the Nasdaq has easily outperformed the S&P 500 and Dow Jones Industrial Average. And one of the reasons for this is the astronomical surge in the stock price of Tesla (TSLA). We do however believe the stock of Tesla is significantly overvalued and is a bubble waiting to burst.
Below the returns of the main market indices over the last week, 25 August 2020 to 31 August 2020 (sorted from best performer to worst performer)
We are however surprised at the current strength of the financial markets considering the current and future impact of coronavirus cases in the the United States. This will have a negative impact on businesses, consumers and the health care sector in general. The impact of Covid-19 on consumers can already be seen in the earnings reported by banks in which the major banks made massive provisions for credit losses and write offs. We feel the markets (all major US indices) are significantly overvalued at current levels and it is due a strong correction.
Below the returns of the main market indices over the last week, 25 August 2020 to 31 August 2020 (sorted from best performer to worst performer)
- S&P 500: 1.66%
- Dow Jones: 0.64%
- Nasdaq: 2.69%
We are however surprised at the current strength of the financial markets considering the current and future impact of coronavirus cases in the the United States. This will have a negative impact on businesses, consumers and the health care sector in general. The impact of Covid-19 on consumers can already be seen in the earnings reported by banks in which the major banks made massive provisions for credit losses and write offs. We feel the markets (all major US indices) are significantly overvalued at current levels and it is due a strong correction.
Dow Jones, Nasdaq and S&P 500 performance for the last month
So over the last week the Nasdaq was the worst performer of the major US indices. So what does the returns over the last month look like?
Below the returns of the main market indices over the last month (2 August to 1 September 2020, sorted from best performer to worst performer)
So what about the returns over the last year?
Below the returns of the main market indices over the last year (2 September 2019 to 1 September 2020), sorted from best performer to worst performer)
Below the returns of the main market indices over the last month (2 August to 1 September 2020, sorted from best performer to worst performer)
- Nasdaq: 9.59%
- Dow Jones: 7.58%
- S&P 500: 7%
So what about the returns over the last year?
Below the returns of the main market indices over the last year (2 September 2019 to 1 September 2020), sorted from best performer to worst performer)
- Nasdaq: 45.32%
- S&P 500: 17.50%
- Dow Jones: 6.09%
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
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:
Below a summary of the returns provided by the three major US stock market indices over the last 10 years:
- Nasdaq: 391.04%
- S&P 500: 199.29%
- Dow Jones (DJIA): 161.87%