ESG companies, or environmental, social, and governance minded companies, are likely to provide good returns to investors.
Powered by big gains in popular technology companies like Apple, Amazon and Netflix, the Nasdaq composite barreled through the 8,000 milestone for the first time Monday and hit a new all-time high.
The surge is the latest sign that the longest bull market in Wall Street history remains healthy and continues to be driven by innovative tech companies that are transforming the way people communicate, shop and consume media.
“New highs are a sign of strength,” say Chris Verrrone, a partner at Strategas Research Partners, a New York-based investment firm.
The Nasdaq, which is now up more than 16 percent this year after surging 28.2 percent in 2017, is being led by the so-called “FAANG” stocks — Facebook, Apple, Amazon, Netflix and Google parent Alphabet — which are responsible for a big chunk of the tech-dominated index's sizable gains.
Innovation in smart phones, social media, video streaming, cloud-based computing and machine learning is boosting the fortunes of tech leaders who hold dominant positions in their respective niches.
The stock market has gotten an added boost Monday from an easing of trade tensions, as the United States and Mexico reportedly will announce today that they have come to a new bilateral trade agreement.
In morning trading the Nasdaq notched an intraday record of 8022.85.
iPhone maker Apple is the most valuable company in the U.S., and earlier this month became the first American company to achieve a market value of $1 trillion.
The FAANG stocks have been among the biggest gainers in the record-long bull market, which has now lasted 3,548 days.
Since the start of the bull run on March 9, 2009, Netflix shares have risen more than 5,600 percent, Amazon has rallied more than 3,000 percent and Apple has gained more than 1,700 percent, according to data from S&P Dow Jones Indices.
In early trading Monday, Netflix shares are up nearly 4 percent, Facebook shares are up 2 percent, Alphabet is more than 1 percent higher and Apple and Amazon are also trading up.
Tech stocks are being driven higher by investors because of strong profitability. The information technology sector of the Standard & Poor's 500 stock index, for example, posted profit growth of more than 26 percent in the second quarter, with more than 90 percent of the companies topping Wall Street forecasts.
“Earnings” are driving the rally, says Gary Kaltbaum, president of Kaltbaum Capital Management. “Technology always leads markets. And now we're getting another leg up.”
Data from Strategas show that it’s not only the Nasdaq, or FAANG, that’s hitting new highs. Other stock indexes, including those like the Value Line Composite Index, where each stock has an equal weighting in the index's fortunes, are also scoring fresh highs.
The stock market is revving back up after hitting a fresh all-time high last week after going six months trading below its prior January peak.
“This type of market reset is consistent with strong returns going forward,” says Todd Sohn, a technical analyst at Strategas Research Partners, told USA TODAY.
“Margin of Safety” is the title of an old investing book, first published in 1991 and out of print for years, that's making a comeback.
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