The chasm between the Nasdaq Compound and its rival benchmarks in the first half of 2020 has been very similar between Olympic sprinter Usain Bolt and everyone else in the world.
The tech-laden index has enjoyed a growing advantage between itself and the Dow Jones Industrial Average USA: DJIA
and the US S&P 500 Index: SPX
so far this year due to its perceived resistance against the COVID-19 pandemic that wreaked havoc on the financial markets and economy beginning in March.
The Nasdaq is up 10% year-to-date, while the Dow is down 10.8% so far, the S&P 500 is down about 6% and the Russell 2000 small cap index is down over 15% in the first six months of a dramatic year of events led by the viral outbreak.
The major landmarks have actually starred in a powerful resurgence of a defeat induced by concerns about the economic damage from the closings and the social distancing measures put in place to reduce the spread of the deadly contagion that has recently gained momentum in several states.
Since a low hit on March 23, the Dow has gained 37%, the S&P 500 has gained 36% and the Russell 2000 US Index: RUT
is up 41%, while the Nasdaq US: COMP
It has increased by more than 43% from that low point, and it is that superior performance that has kept the Nasdaq so far this year.
In fact, the last time the Nasdaq was higher in the middle of the year, while the Dow and S&P 500 fell was 1977, according to the Dow Jones Market Data, and that this is only the second occurrence in the Nasdaq’s existence, which It was first established in 1971.
The Nasdaq has been enjoying the best outperformance against the economically sensitive Dow since 1983, when it had a 20.3 percentage point advantage over the blue chip index. It is also the widest half-year divergence between the Dow and the S&P 500 since 1983, when it had a lead of 17.6 percentage points.
Some of the top results are due to a handful of growing Nasdaq stocks that have risen this year, including Apple Inc.USA: AAPL,
Microsoft Corp. USA: MSFT,
Amazon.com USA: AMZN,
Google Parent Alphabet Inc.USA :ECU
USA: GOOGL
and Facebook Inc.USA: FB,
They have contributed to gargantuan returns for the market cap weighted Nasdaq, and to a lesser extent for the S&P 500, the Wall Street Journal wrote.
Meanwhile, the Dow’s 30 components have been considered more in tune with the economic outlook after the viral outbreak, while the Nasdaq is seen as a bid for stocks that may be more resilient to the public health crisis.
That said, in 1983 the Dow and S&P finally outperformed the Nasdaq. The Dow gained 3%, the S&P 500 fell 1.89% and the Nasdaq Composite fell a heartbreaking 12.58% in the remaining six months.
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