US Stock Markets: Will Nasdaq Hit All-Time Highs in June?

  • US stock markets have recouped most of their losses. The Nasdaq Composite Index is only 1.6% away from its all-time highs.
  • After rising in April and May, markets are looking strong in June as well.

US stock markets in June

US stock markets have defied the pessimism and continued to move higher. They rose sharply in April and closed with gains in May also. So far in June, markets are in the green. The Nasdaq Composite Index (NASDAQ:QQQ) has been particularly strong. The index has risen 2.0% for the month and 7.9% for the year. Based on Wednesday’s closing prices, the Nasdaq Composite Index is only 1.6% away from its all-time highs.

Nasdaq versus SPY and Dow Jones

Other US stock market indices like the Dow Jones Index (NYSEARCA:DIA) and the S&P 500 (NYSEARCA:SPY) are still in the red for the year. Strong gains in tech stocks like Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) helped the Nasdaq recoup its losses. However, while tech stocks have rebounded, other stocks are still below their all-time highs.

Will Nasdaq hit all-time highs in June?

The overwhelming sentiment is still bearish. CFOs, HNIs, fund managers, and almost everyone expects US stock markets to crash. Previously, Jeffrey Gundlach and Paul Tudor Jones said that they expect a double bottom in US stock markets, which would mean a retest of March lows.

However, the contrarian bet seems to be working out. US stock markets have continued to move upwards. Low equity allocation, high cash holdings, and high short interest are contrarian buy signals. As for the tech-heavy Nasdaq, tech stocks have been on a fire. Some companies in the tech space, like Amazon and Netflix, could benefit from the stay at home orders and the expected change in consumer behavior.

US stock markets: Growth versus value investing

Looking at US stock markets, growth investing strategies have outperformed value investing. Investors still prefer growth stocks, which is reflected in the spike in tech stocks despite the pandemic. The momentum looks strong as the Nasdaq Composite Index aims at its all-time highs in June.

Meanwhile, reluctance to tech stocks is one reason why Berkshire Hathaway has been underperforming. To learn more, read Why Warren Buffett and Berkshire Are Underperforming.