The Nasdaq index is one of the
three biggest indices in the United States. It is known for the big technology
companies that make it. These include the biggest companies like Apple, Amazon,
and Microsoft. YTD, the best-performing company in the index is Mercadolibre,
which has gained by 68%. It is followed by Ctrip and Advanced Micro Devices
(AMD), which have gained by more than 50%.
Yesterday, the index rose by a
few basis points. This happened in part because of the impressive economic data
from the United States. It was also in part because of the Initial Public
Offerings (IPOs) that happened yesterday.
Pinterest was the first company
to go public. The company provides a digital pinboard, where people from all
around the world can post pictures and make purchases. It is used by more than
200 million people every month. After becoming a public company, the stock rose
by more than 25%, valuing the company at more than $12 billion.
Zoom was the next company to go
public. The company provides videoconferencing platforms for companies from
around the world. It was founded in 2011. As a public company, the stock price
gained by 72%, giving it a market valuation of more than $15 billion. In recent
years, investors have preferred enterprise technology companies like Twilio,
Salesforce, Zendesk, and Apptio. This is because many companies are moving to
adopt the technologies offered by these companies.
In the near future, investors
will welcome other unicorns to the public market. Some of the companies that
are expected to go public soon are Uber and Palantir Technologies.
Still, all has not been well for
the IPO market. A few weeks ago, Lyft went public, with its stock price gaining
by more than 20%. Since then, the stock has declined sharply as investors
question the business model.
This year, the Nasdaq index has
gained by more than 15%, fueled by a number of factors such as the anticipated
IPOs. It has also gained because of the hopes of a trade deal and the
relatively strong earnings by American tech companies. Yesterday, the index
ended the day at $7712, which is close to the YTD high of $7733. On the chart
below, this price is above the 21-day and 42-day moving averages. The RSI has
gained to above 60 while the signal line of the MACD indicator has moved
higher. When the market opens on Monday, the index is likely to continue moving
higher.
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