It rumbles on the Nasdaq of the US stock exchange. A rebalancing will be done there later this month, because the exchange operator believes that big tech companies make up too much of the exchange’s value. This Friday it will become clear which companies need to make concessions in favor of a better balance sheet.
That is, if those companies’ shares move, the entire stock market fluctuates with it. It is therefore also an understandable step, thinks Nico Inberg of DeAandeelhouder.nl. “In particular, the largest Nasdaq companies have taken the most,” he says. “Nvidia is up 200% and while Apple and Microsoft are better than expected, Amazon and Facebook are also skyrocketing.”
‘They’re going to make bigger guys a smaller head’
According to Inberg, it’s companies like this that drive the Nasdaq up an average of 38% after six months. “But if you look at the underlying, there are only 23 funds that are up more than 38 percent,” he points out. And there are 25 bottoms that are inferior. So it’s leaning to one side, which is why they want to do a rebalance. They will reduce the big shots and the money will then be divided among the other participants ».
Fear
While shareholders of the companies that will be hardest hit in the long run shouldn’t fear in principle, Inberg points out that the pain will be felt in the short term. “Exact numbers will be announced on Friday, but Microsoft and Apple in particular will take the brunt of the hits,” he says. Especially if you look at Microsoft’s weighting in the Nasdaq: it’s 12.9%. That will come back to 10.9 or 11.1 percent.’
ETFs that track the Nasdaq, such as Investco, will also suffer, Inberg thinks. “Investco has invested $200 billion in the Nasdaq and next Friday it has to auction off $3.5 billion worth of Microsoft and Apple shares,” he says. ‘This will have an impact.’
Source: BNR
Sharon Rock is an author and journalist who writes for 24 News Globe. She has a passion for learning about different cultures and understanding the complexities of the world. With a talent for explaining complex global issues in an accessible and engaging way, Sharon has become a respected voice in the field of world news journalism.
