The Nasdaq leads a reversal in US stocks as it continues to underperform.
There is a growing consensus (awareness?) that we were in a monumental tech bubble and mid-cap tech holders and foamier names are using every bounce to lighten up. The market is more focused on valuations and P/Es above earnings multiples or (heaven forbid) the total addressable market. This presents a major challenge for nonprofit tech companies, especially as fundraising streams dry up or are at much cheaper levels than in previous cycles.
The index opened solidly higher today but sold relentlessly. It now threatens to fall into Friday’s open gap.
If this is another interim high for the Nasdaq, it will be well below the June rebound high of 12,320.
That said, I’m skeptical of any movement towards the end of the month/quarter. Hedge funds could be making up their sleeves as they seek to remove some ugly artists from their books. This could reverse quickly in the third quarter as long as Treasury yields remain within recent ranges.