Tuesday, March 3, 2015

The “techno” is again vibrate markets – The World

Le Monde | • Updated | By

Fifteen years: the time it took the Nasdaq to cross again the threshold of 5000 points. The index has closed, Monday, March 2 in New York, up from 0.90% to 5 008.10 points. The last time this level was reached, it was during the “Internet bubble”, 27 March 2000. The stock purgatory may seem relatively short compared to twenty-five years it took the Dow to regain its records from before the 1929 crisis.

This new thrust is the culmination of almost a continuous upward trend since the end of the crisis of 2008. The announcement Sunday of redemption US specialist Freescale Semiconductor NXP by the Dutch, to $ 11.8 billion (€ 10.5 billion), the Monday Aruba Netwoks by Hewlett-Packard (however listed on the New York Stock Exchange , rival Nasdaq) to 2.7 billion, and reassuring figures on wage developments in the US, helped give enough push to pass this symbolic threshold, which has only been achieved only ‘during seven sessions in the history of Nasdaq.

Comparison is not reason

What bring us back to the eve of the outbreak of the Internet bubble. In the process, the index had fallen to 1 108 points in October 2002. But comparison is not reason. While some are concerned about the current valuation of certain securities listed on the Nasdaq, the situation in 2015 is very different from that of 2000.

First, the Nasdaq has changed its face. The share of high-tech companies has significantly reduced. The sector accounted for 57% of the index at the end of 1999 against only 43% today. The decline was particularly spectacular in the field of software, which weighed in 2000 a quarter of the index. In 2015, only 10%. Nasdaq has long been known as the index of the technology sector. . But today, it is mostly the broadest barometer of growth stocks

On the other hand, some sort was done: the Nasdaq has only 2,568 companies in 1999 against 4715 . In contrast, the average capitalization has more than doubled (1.16 against $ 2.95 billion). One could imagine that this is the 2000 bubble burst which took with it most of the companies that have since disappeared. In fact, reducing the number of listed companies is mainly due to a vast movement of mergers and acquisitions, which is responsible for 53% of disappearances. Bankruptcy, they only represent just over 17%, according to data published by Nasdaq.

“Small new”

In addition, the champions of yesterday are not necessarily those of today. In the first ten caps, WorldCom (5 th ) or Sun Microsystems (8 th ) were prominently in 2000. The first sank with all hands during a resounding failure in 2002, while the second was redeemed by Oracle in 2009.

Since then, Microsoft has lost its leading position in favor of Apple. Although still second overall capitalization worldwide leader in software has lost its luster. In fifteen years, its value has fallen by $ 243 billion, or 40% to $ 363 billion. This allows Apple to now largely leading the race with a capitalization of 755 billion.

Behind the arrival of a series of “new kids” has fueled the rise in the Nasdaq. The course Facebook has doubled in just three years, while Netflix action brought to 15 dollars in 2002, is now 477. As for the car manufacturer Tesla, the stock has increased by 11.5 in the same not five years

There remains the question that torments many observers. This crossing of the 5 000 points Does this mean that the bubble is back? In fact, when looking at valuation levels, they do not have much to do with what they were fifteen years ago. The course benefit ratio – the price-to-earnings ratio (PER) – averaged 152 to the end of 1999, it is now only 26, according to data from FactSet. For example, Yahoo was valued 787 times its profits against 36 times now. The PER of Apple fell from 37 to 17.

bearer Market

While in 2000 investors were content mostly promises fifteen years later, it is first of sounding profits and stumbling they buy. Even if Apple or Google valuations are high, difficult to accuse them of selling wind as was the case of some companies in the late 1990′s fourth quarter results, better than expected overall are there to prove it.

Finally, the Nasdaq has a buoyant market. Cash mountains injected by the Federal Reserve (Fed) in the wake of the 2008 crisis have been a powerful fuel to bring the stock to the top. In a context of economic recovery in the US, the Nasdaq is not the only one to enjoy the euphoria. The S & amp; 500 P and the Dow Jones gravitate also very high levels

With these 5000 with points, the Nasdaq is on the verge of his ninth consecutive quarter of rising, which does. never happened since its inception in 1971. How long will last this new series? That is the question now

Read also:. The great shift of markets


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