NASDAQ hits fresh record highs as hedge fund manager warns valuations are “strong” | Invezz

NASDAQ Composite Index
is trading about 1.2% higher on Monday to hit fresh record highs at 13,729, driven by a surge in Apple stock.

Fundamental analysis: Valuations strong

John Studzinski, vice chairman at asset management company PIMCO, says current market valuations are “strong” but also indicate an economic recovery expected in the second half of 2021. 

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“There’s no question the current market reflects what people feel is going to be a reasonable amount of fiscal and monetary purchasing program support,” said John Studzinski, vice chairman at Pimco. 

“The issue will be if the fiscal support continues well beyond this year — the impacts that might have on things like inflation, or asset valuations,” he added.

Global central banks and governments were doing everything possible to curb the spread of the coronavirus, which resulted in concerns that current market valuations are too high due to unprecedented fiscal and monetary stimulus measures. 

On the other hand, some believe that strong market valuations indicate a recovery in the global economy once the pandemic is brought under control, helped by coronavirus vaccine rollouts. 

However, the number of infections has been on the rise over recent months and new strains of the virus have emerged in the United Kingdom, Europe, Latin America and South Africa. 

Studzinski admitted that he expects the recovery will be uneven as “it’s going to be fraught with uncertainty … over mutations (in the coronavirus) and uneven distribution of the vaccines around the world.”

The World Economic Forum is set to take place this week, where political and business leaders will discuss and work on solutions to rebuild the global economy in 2021.

Technical analysis: Apple helps NASDAQ to hit record highs

Apple stock price is trading about 3% higher today, two days before the tech giant is scheduled to report its quarterly earnings. Investors are buying Apple stock as they expect strong iPhone sales on the back of the iPhone 12 and holiday season.

NASDAQ weekly chart (TradingView)

NASDAQ Composite Index price is up 1.2% on the day to hit levels above 13700 for the first time ever. The mid-term target upside remains around the 15000 mark with support located at 12000.


John Studzinski, vice chairman of PIMCO, said currently robust market valuations point to a stronger recovery in the global economy in the second half of this year.

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