UPDATE

🌤️ Happy Thursday

Good morning. We hope the first half of your week got off to a great start. Whether you’re heading out for work, sipping on a coffee, or doing something else in your routine, thanks for allowing us to be a part of your morning!

Read time: 1.5 minutes

WEEK IN REVIEW

🔎 Looking For Another?

Ring the Bell for gender equality by UN Women, via flickr

We’ve discussed in length how the growth of large-cap stocks has propelled the S&P 500's value. Basically, larger companies like Apple and Microsoft are weighed heavier than other companies on the list. So if these firms grow, the index responds much faster. The same is true for a decrease in stock price. Even more exclusive is the Dow Jones Industrial Average, which tracks the 30 largest firms in the United States.

• However, tracking only large companies can be a problem for economists and analysts who want a complete picture of U.S. economic performance. In the case of the S&P 500, the performance gains for a firm at #400 may seem entirely invisible when Amazon stock shoots up or down.

This is why a third option exists: the Nasdaq Composite, which seeks to track nearly every company publically traded on the New York Stock Exchange. With the movements of every company represented to some degree, analyzing the Nasdaq can give you an idea of how the American investing world is holding up.

Psst, if you want more information on indices, check out the MARK IT. Explained section of Issue #17: Moving Markets!

📈 Market Performance

Nasdaq (5-Day), via Google Finance

With the features of the Nasdaq in mind, the past month has had a similar uptrend to the S&P 500. This may be in part because the Nasdaq weighs tech and IT stocks heavily, even though all firms are represented.

However, if tech stocks come down, so can the index. Similar to the S&P, which saw a relatively red week, the Nasdaq dropped 1.28% from last Thursday. The current value of the index is still much closer to its 52-week high than the low, but these swift changes show how indices can be price sensitive and have similar performances, especially if they track the same stocks.

ONE MORE THING

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Thanks again for reading!

Nothing MARK IT. publishes constitutes professional and/or financial advice, nor does any information published by MARK IT. constitute a comprehensive or complete statement of the matters discussed.