29th June, 2021
The global financial market is home to some genuinely lucrative stock markets and indexes, with the Nasdaq 100 and the New York Stock Exchange (NYSE) offering relevant cases in point.
Make no mistake; these represent two of the largest stock exchanges in the world, with a combined market capitalisation value in the region of $41.2 trillion at the beginning of 2021. Not only do these indexes offer access to some of America’s most generative blue-chip stocks, but they can also be traded as indices that provide instant diversification.
But how have each index performed during the coronavirus pandemic, and which option is better from a trader’s perspective?
Nasdaq, the NYSE and Covid-19 – What Did We Witness During 2020?
Before we compare the general pros and cons of these indexes, it’s first important to consider the performance of both during the global pandemic of 2020 and the first half of 2021.
Interestingly, both indices have seen similar price trajectories over the course of the last 15 months or so, dating back to the categorisation of Covid-19 as a global pandemic in March 2020.
For example, the Nasdaq 100 plunged to a low of 6,879.52 on March 20th, 2020, before rising incrementally (and largely without interruption) to 14,069.42 through June 11th, 2021. This represents and increase of more than 100% since the pandemic began, with this sustained rally being led by the world’s leading tech stocks.
Interestingly, the NYSE fell from an even greater height during the wider stock market crash on March 20th last year, plunging to a five-year low of 9,133.16.
Once again, however, the index has increased considerably to 16,694.93 as of June 11th, rising incrementally since the beginning of the year.
The key takeaways here are the rate of growth in each exchange, with Nasdaq having appreciated by more than 100% since the beginning of the pandemic. Similarly, the index has experienced less peaks and troughs during the period, with blue-chip tech stocks such as Apple and Amazon performing particularly well and continuing to rise at a disproportionate rate to their earnings.
However, the NYSE has appreciated at a more consistent rate during Q2 of this year and as the global economic recovery has gotten underway, whereas the Nasdaq price has stagnated amid growing fears of a potential tech stock bubble.
Which Index is Right for You?
In addition to their recent and largely continuous price growth during the pandemic, both of these indices are recorded products of forex trading and can be traded via accessible contracts-for-difference (CFDs).
The Nasdaq index is particularly accessible, with brokers such as Tickmill.com making it available through various leveraged products.
Such historic and real-time similarities can make it hard to distinguish between the Nasdaq 100 and NYSE as a trader, but there are key differences that can enable you to make a more informed decision.
Certainly, Nasdaq is considered to be a more stable and robust index, thanks to its careful selection or premium tech stocks. It also creates high levels of volatility through more rapid price movements, allowing opportunities for speculators and investors with a short-term outlook.
Conversely, the NYSE may offer a little more value from the perspective of long-term investors, especially when you consider the sustainability of the recent price growth experienced by Nasdaq 100 shares since March 2020.
More specifically, several Nasdaq stocks have grown at a disproportionate rate to earnings as demand soared during the pandemic, with a potential correction likely to cause significant losses that will compare negatively to the NYSE in the near-term.