Share performance in Aug 20

August 20 proved to be one of the most successful months on record for tech stocks. The S&P 500  - heavy in tech –had its best performance for 30 years. The Dow (now including Salesforce.com. See Salesforce.com replaces Exxon Mobile in DOW) ) had its best month in 36 years!   

It is amazing to record that NASDAQ is up 10.5% in one month making it a 31% gain YTD and yet another closing record high. Set this against a mere 1% gain in the FTSE100 and a 21% FALL YTD and you get why tech really has been the place to be in 2020. Unfortunately, most of the tech gains have been (yet again) in the US based FAANGs (or FANMAGs as I prefer) Although the FTSE SCS Index (which most closely tracks the quoted UK HQed Software and IT Services companies that we track) was up 5% in Aug that index is still DOWN 5% YTD.

Outlook

As every month passes and Big Tech continues to soar, I get more and more nervous. I’ve been reluctant to liken the present situation to the dot.com madness of 1999/2000 but I think we might have entered the ‘Irrational Exuberance’ stage. You may remember that Alan Greenspan used this expression when Chair of the US Federal Reserve Board in 2000. In Apr 2000 Nasdaq hit a record high. It took 15 years, until Apr 2015, to recover to that high.

NASDAQ again hit a record high in August 2020. The future is littered with possible pitfalls - a global recession brought on by C-19, an escalation in China:US tensions, a US presidential election and, in the UK, a no deal BREXIT. I could go on. If we do have a ‘correction’ I wonder how deep it will be and how long it will take this time to recover to August 2020’s high?

For an extensive and detailed Review of Share Performance in Aug 20, see HotViews Extra. This is available to all TechMarketView clients including HotViews Premium. You can sign up for just £395+VAT pa.  CLICK HERE!

Posted by: Richard Holway at 09:55

Add a comment