Bull Market Isn't Materializing: Barron's Daily

The first quarter draws to a close this week, a period when the Nasdaq-100 awoke from its long bear-market slumber.

Photo Insert: The interest-rate increases that drove a stake through the heart of stocks in 2022 haven’t finished.

The index, comprised of the 100 biggest stocks in the technology-heavy Nasdaq Composite, has gained 20% since its trough at the end of December, technically marking the entry into a bull market, Brian Swint reported for Barron’s Daily.

Usually, big gains in the index suggest an increased appetite for risk and high-growth companies. But investors shouldn’t mistake hitting that landmark for a buy signal.

For a start, it’s mainly the big tech stocks–Apple, Microsoft, Meta Platforms, Amazon, and Alphabet–that have gained. They all got investors on side by promising to brace for a slowdown and cutting jobs.

Other stock indices haven’t done nearly as well. The Dow Jones Industrial Average is still down on the year, for example.

The interest-rate increases that drove a stake through the heart of stocks in 2022 haven’t finished, though the end may be near if the Federal Reserve chooses to pause after another quarter-point hike. Inflation data out Friday will help color in the picture.

Beyond the possibility of higher rates, the indictment of defeated ex-President Donald Trump may also add to a risk-off sentiment in the second quarter. Markets shrugged it off at first, but that could change at any minute.

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