02 October 2018Reading time: 2 minutes

During the past months, the Nasdaq-100 has continued the upward movement from the previous period and has set new records several times. Compared to the start of this year the technology index is now approximately 15 percent higher at 8.041,97 points. One of the front runners is Apple. The stock price of the American electronics manufacturer is more than 30 percent higher at 224,95 dollar compared to the beginning of this year.

The digital economy seems to have taken a more important role in the growth of the American economy. In 2016 the digital economy represented only 6,5 percent of the American gross domestic product, which is higher than more traditional sectors such as retail (5,9 percent) and construction (4,3 percent). The growth of the digital economy is also way more rapid than the overall US economy. Over the past decennium the annual growth of the digital economy was 5,7 percent against 1,5 percent of the total American economy.

The trade conflict between the United States and China has recently worsened, which among other things could have a negative effect on American technology companies. Half-way September, the American president Donald Trump imposed new import tariffs on Chinese goods and products. The combined worth of this imposition is 200 billion dollar. In response China has already taken counter measurements. It remains to be seen if this trade dispute will escalate further in the coming period.

Furthermore American stocks were also affected by the recent decision of the Federal Reserve to raise the interest rate with 25 points to a range of 2 to 2,25 percent. It is the third interest rate increase of the American Central bank this year. The Fed expects another raise later this year, in order to anticipate on the further improving American economy. The Central bank expects an economic growth for the United States of 2,8 percent for 2018 and 2,5 percent for 2019.

The future price of the Nasdaq-100 index is subject to several political, industrial and sector specific as well as economic factors. Investors should consider such risk when making their investment decisions. Developments can be different at any time than investors expect, which can result in capital losses.

Vontobel products on the Nasdaq-100 are tradable at DEGIRO.

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02/03/2021 09:55:02