Optimism has been sweeping the broader market since mid-October when the United States and China announced the phase-one trade deal, after months of wrangling. Decent earnings releases, better-than-expected third-quarter U.S. GDP data, easy global monetary policy and the extension of the Brexit deadline have also been aiding the market. The S&P 500 and the Nasdaq have hit highs in the process (read: Top and Flop ETFs of Last Week).
The rally reached a new level on Nov 12 after President Donald Trump suggested that a trade deal with China could see the day of the light soon. The Nasdaq Composite Index breached the 8,500-mark. Invesco QQQ Trust (QQQ - Free Report) gained 0.3% on Nov 12 and hit a new record at $202.21. “The stocks most exposed to the China trade war are back to prior peaks – and pre-trade war/1Q18 levels – in terms of both performance and valuation,” per analysts.
What Bodes Well for Nasdaq-100
The fund QQQ is heavy on the technology with about 46.7% exposure, followed by 21.5% focus on communication services and 15.3% exposure to consumer discretionary. Apple (AAPL - Free Report) and Microsoft (MSFT - Free Report) take about 23% of the fund. Now, the technology sector is highly correlated to trade. Apple has huge exposure to China. So, any development on the trade front is enough to boost tech stocks (read: 5 Sector ETFs Most Exposed to Trade Tensions).
Expectations of a strong holiday shopping season are also likely to boost technology, communication and consumer stocks. Total retail sales are expected to grow between 4.5% and 5% during the holiday period, up from 3.1% recorded in 2018, according to Deloitte's annual holiday forecast.Apple deserves a special mention here. Notably, a slew of new gadgets and more expected buying on Black Friday may boost Apple’s earnings in the fourth quarter (read: Should You Buy Apple ETFs Ahead of the Holiday Season?).
Per the Earnings Trends issued on Nov 6, 2019, about 68.7% of the technology sector of the S&P 500 reported earnings with a blended beat ratio of 65.2%. Though the consumer discretionary sector has come up with a moderate beat ratio of 42.1%, the space recorded 9.3% expansion in earnings as well as revenues.
5 Top-Performing Stocks on Nov 12
Against this backdrop, below we highlight a few top-performing Nasdaq-100 stocks on Nov 12.
Autodesk Inc. (ADSK - Free Report) – Up 3.36%
The company develops model-based design, engineering and documentation software and offers consulting, support and training services. The company serves customers in architecture, engineering and construction; manufacturing; and digital media and entertainment industries. The stock belongs to a favorable Zacks industry (placed at the top 16% of 250+ industries).
Facebook Inc. (FB - Free Report) – Up 2.56%
The company enables people to connect, share, discover and communicate with one other on mobile devices and personal computers. The stock hails from a favorable Zacks industry (positioned at the top 41%).
IDEXX Laboratories Inc. (IDXX - Free Report) – Up 1.9%
It is a developer, manufacturer and distributer of products and services primarily for the companion animal veterinary, livestock and poultry, water testing and dairy markets. The stock comes from a favorable Zacks industry (positioned at the top 33%).
Automatic Data Processing Inc. (ADP - Free Report) – Up 1.8%
It is one of the leading providers of cloud-based Human Capital Management (HCM) technology solutions, including payroll, talent management, Human Resources and benefits administration, and time and attendance management, to employers around the world. The stock belongs to a favorable Zacks industry (placed at the top 30%).
Mylan N.V. (MYL - Free Report) – Up 1.7%
Mylan N.V. is a global pharmaceutical company with a well-established generics business as well as a presence in specialty pharmaceuticals. The stock hails from a favorable Zacks industry (placed at the top 36%).
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