Nasdaq 100 Index Officially Enters A Bull Market: History Suggests Returns Will At Least Double From Here

Benzinga2023-03-30

ZINGER KEY POINTS

  • The Nasdaq 100 index officially entered a bull market after rising more than 20% since October 2022.

  • History suggests that Nasdaq 100's returns more than doubled during prior bull markets.

The Nasdaq 100 index, which includes the hundred largest non-financial firms listed on the Nasdaq stock exchange, officially entered a bull market at the end of the trading day on March 29, 2023.

The tech-heavy index, which is perfectly replicated by the Invesco QQQ Trust ETF, has climbed by more than 20% from its lows in October 2022 to date, breaking the bear market that began in February 2022.

So far, the first quarter of 2023 has been the second best-performing quarter for the Nasdaq 100 index in the previous ten years, with a 17.5% gain, trailing only the stunning 30% rise in the second quarter of 2020 following the post-Covid rally.

The following stocks have been the primary drivers of the major technology stock index's ascent over the past months:

  • NVIDIA Corp, up 85% year to date, bringing 2.8 percentage points to the index's overall performance.

  • Apple Inc., up 23% year to date, which similarly provided 2.8 percentage points to the Nasdaq's overall performance.

  • Microsoft Corporation, up 17% year to date, adding 2.2 percentage points to total performance.

  • Meta Platforms, up 70% year to date, contributing for 1.7 percentage points to the Nasdaq's total performance.

  • Tesla, Inc., up 57% year to date, delivering 1.6 percentage points to the performance of the index.

Nasdaq 100 Index's Return More Than Doubles During Bull Markets

There have been four bull markets in the Nasdaq 100 index since 1990:

  • From October 1990 to July 1998, when the Nasdaq 100 delivered a total return of 962.4%, which corresponded to an annualized return of 25.8%.

  • From October 2002 to October 2007, when the index delivered a total return of 153.4%, which corresponded to an annualized return of 16.3%.

    • From March 2009 to February 2020, when the index delivered an astonishing total return of 1,156.1%, which corresponded to an annualized return of 21.1%.

    • From April 2020 to February 2022, when the index delivered a total return of 134.2%, which corresponded to an annualized return of 46.2%.

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