Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

Dow Jones futures up 75pts, Nasdaq confidently above 11,000 points

‘There remains the sense in the market that the lull in the VIX might be the calm before the storm, with August seasonally a time of considerable volatility for US stocks,’ said IG market analyst, Kyle Rodda.

Facebook, Amazon, Apple and Google share prices continue to dominate news flow

Though equities have rallied from their March-lows, many key benchmarks – such as the Dow Jones, S&P 500, the ASX 200, the DAX and the FTSE 100 – remain some ways off the levels they achieved in January.

The exception to this rule is the Nasdaq 100 – which has traded above the 11,000 point level since Monday.

Tellingly, the tech-heavy Nasdaq not only trades well off the lows it recorded in March, but currently trades at fresh all-time highs – finishing out Wednesday’s session at the 11,125.44 point level.

This comes off the back of a high profile week of quarterly earnings reports, with a number of the FAANG stocks defying analysts’ revenue and earnings estimates, despite a plethora of economic headwinds.

Heading into these results – much had been made about the dominance of the FAANG stocks – which currently make up a significant portion of US markets. For reference, Facebook, Apple, Amazon, and Google have a combined market capitalisation of approximately US$5.2 trillion.

Looking at the broad strokes of these tech results:

  • Facebook reported Q2 revenue of US$18,321 million, up 10%, against diluted earnings per share of $1.80, up 98%
  • Apple reported Q3 revenue of US$59.7 billion, up 11%, against diluted earnings per share of $2.58, up 18%
  • Amazon reported Q2 net sales of US$88.9 billion, up a staggering 40%, against diluted earnings per share of US$10.30
  • Alphabet (Google) reported Q2 revenues of US$38,297 million, against diluted earnings per share of $10.13

Beyond these results, big tech remains overwhelmingly liked by sell-side analysts, with Facebook, Amazon and Google all commanding Buy ratings, on average, according to MarketWatch. By comparison, Apple has an Overweight rating, on average, also according to MarketWatch.

As we head into Thursday’s session, Nasdaq futures are currently suggesting the market will open flat.

Dow Jones futures and volatility at a glance

By comparison to the Nasdaq, the Dow Jones (DJIA) has failed to break above the levels it recorded in January, and remains down around ~5% year-to-date, last trading at 27,201.52 points.

On Wednesday, the best performing Dow constituents were Walt Disney, Boeing, and Raytheon Technologies; while the worst performing were Walmart, Cisco, and Verizon.

Reflecting on recent market volatility, IG market analyst, Kyle Rodda, argued that: ‘The market’s positive bias is no more evident in the US VIX index. It closed at the 23-level overnight, having briefly dipped into the 22-level, to trade at its lowest since the beginning of the virus panic at the end of February.’

Mr Rodda finished by noting that ‘there remains the sense in the market that the lull in the VIX might be the calm before the storm, with August seasonally a time of considerable volatility for US stocks.’

Dow Jones futures traded 75 points higher at the time of writing, suggesting the key US benchmark would open slightly higher on Thursday.

Want to take a position in US markets, long or short?

Create an IG trading account or log in to your existing account to get started now.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Act on share opportunities today

Go long or short on thousands of international stocks with spread bets and CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.