The Nasdaq 100 briefly erased all of its coronavirus losses Thursday, hitting a new intra-day high of 9,741.97 at 9:57 a.m. on Thursday. That marked a 39.3% rise since hitting bottom on March 23. Meanwhile the S&P 500 is in the midst of its best 50-day stretch in history. By the close, all three major indices had retreated slightly, with the Dow Jones Industrial Average up 0.04% to 26,281.82, the S&P 500 down 0.5% to 3,106.76, and the Nasdaq Composite down 0.7% to 9,615.81. The Nasdaq 100, which tracks 100 of the biggest names, closed just off its highs, down 0.8% to 9,629.66).
Though news headlines have been dominated by widespread protests across the U.S. following the death of George Floyd while in police custody, as well as fears of a ‘second wave’ of COVID-19 infections, the stock market has been seemingly immune to any hint of unrest.
That’s in part because Wall Street has moved on from looking at 2020 earning, and is instead focused on 2021 and beyond. As one analyst told Fortune, “investors are basically saying, ‘When it comes to earnings, tell me something I don’t know. I already know that 2020 is going to be horrible,’” said CFRA’s chief investment strategist Sam Stovall.
Even Thursday morning’s release of new unemployment data, which was worse than economists expected with 1.9 new claims filed, could not dampen the generally optimistic mood that has taken over Wall Street in recent weeks. That’s despite the fact that, as Fortune reported, this marks 11 straight week of unemployment claims above 1 million, a period of job-destruction without precedent in modern American economic history.
The Nasdaq in particular has soared on the strength of a few big names that have thrived during widespread stay-at-home orders: Amazon, Alphabet, Microsoft, Apple, and Facebook make up roughly 20% of the Nasdaq 100. As Fortune has reported, the dichotomy between “winners” and “losers” has become even more apparent, analysts say, because, “in a market where there’s quite a bit of uncertainty, investors almost always…are on the hunt for growth and certainty—that’s the magic combination,” Wells Fargo Investment Institute’s senior global market strategist Sameer Samana recently told Fortune.
Nasdaq 100 stocks that have outperformed since their March lows include Tesla (up 99%), Lululemon (up 84%) and PayPal (up 81%).
“There are no rollercoasters that can replicate what stocks have done so far in 2020,” wrote LPL Financial Senior Market Strategist Ryan Detrick in a note on Thursday. “Here’s the catch though: Big 50-day rallies in the past have taken place near the start of new bull markets, and the returns going out a year were quite bullish.”
Derrick continued, “Although we have near-term worries given this historic run, as some sentiment indicators such as put/call ratios are showing some froth, from a bigger picture perspective, this strong 50-day rally offers a reason to think stock prices may be even higher this time next year.”