Can tech stocks keep gaining?

Read full post at forexlive.com

via Bloomberg

I came across an interesting piece on the Nasdaq yesterday on Bloombergs market’s live blog. The piece made a case for another 10% gain in the US tech driven Nasdaq. the rationale of the piece was as follows: 

1. Yes, the Nasdaq has gained 21%, but other assets look even more stretched. Gold is up +30% on the year and iShares 20+ Treasury bond ETF has climbed 25%. 

2. The Russell 2000 index is generally a good indicator of US economic health and that is down 10% for the year. This suggests that there are plenty of rational equity investors and that there are some level heads around. The Tech driven Nasdaq is higher on expectations of rising earnings. 

3. The surge higher in ISM manufacturing data yesterday at 54.2 vs (53.6 expected) shows the US economy is still on a recovery path despite the rising COVID-19 cases. The expectations are that GDP will turn positive after the last quarter’s slump. According to Bloomberg’s market’s live blog analysts expect the NYSE FANG+ Index’s EPS to grow 45% iin 3Q and 28% in 4Q after a strong 78% jump in 2Q. 

Nasdaq