After maintaining an upward trajectory in the second quarter and through most of the third, the US Nas 100 or Nasdaq 100 index came under pressure in September, with investors looking to take profit from the rally. The index climbed from 13,000 in mid-May to exit the quarter north of 15,300, recording a rally of close to 18% year to date.
Despite concerns around the spread of the Delta variant of covid-19, investors remained optimistic about the prospects for the US economy. Moreover, several businesses continuing with a work-from-home model provided support to tech stocks. The trend could continue into the fourth quarter, lending further upside to the Nasdaq 100 index.
Economic Data to Watch Out for in Q4 2021
October 8, 2021/ November 5, 2021/ December 3, 2021: US Jobs Report
The US economy added just 235,000 jobs in August, representing the lowest figure in seven months, after recording significant growth recently. For September, analysts expect a sharp rebound in nonfarm payrolls (NFP), with around 450,000 job additions. The unemployment rate is also projected to ease to 5.1% in September, from the previous reading of 5.2%.
October 1, 22, 2021/ November 1, 23, 2021/ December 1, 2021: US Markit Manufacturing PMI
The IHS Markit manufacturing PMI declined slightly to 60.5 in September, from a reading of 61.1 in August. The flash reading signalled the slowest growth in factory activity in the last five months, after hitting a record high in the previous month. The final reading is expected to confirm the slight decline in September.
November 3, 2021/ December 16, 2021: Fed’s Interest Rate Decision
Following a significant rebound in the country’s labour market and the overall economy, the Federal Reserve signalled that it could soon begin to moderate the pace of its asset purchases. Interest rate hikes are widely expected to follow that move. Market experts expect the country’s central bank to keep interest rates unchanged at its upcoming meeting.
October 28, 2021/ November 24, 2021/ December 22, 2021: GDP Growth Rate
The US economy grew by an annualised pace of 6.6% during the second quarter, higher than the preliminary estimates of 6.5%. However, the growth rate is expected to decelerate to an annual rate of 5.1% in the third quarter.
October 18, 2021/ November 16, 2021/ December 16, 2021: US Industrial Production
Industrial production rose 0.4% in August, following a 0.8% increase in the previous month. The slowdown in growth was due to shutdowns related to Hurricane Ida. Analysts expect industrial production to rise 6.5% year-over-year in September, following the 5.9% growth rate recorded in the previous month.
October 15, 2021/ November 16, 2021/ December 15, 2021: US Retail Sales
Retail sales in the US surprisingly grew by 0.7% in August, after declining by 1.8% in the previous month. The figure handsomely surpassed analyst expectations of a 0.8% decline.
Q4 2021 Predictions: Other Factors That Could Impact the US Nas 100
Investors will monitor the MAGA (Microsoft, Apple, Google, and Amazon) stocks, which act as the barometer for this index. Tech stocks may remain in focus, as the US economy grows. On the other hand, rising bond yields due to higher debt costs and a possibility of interest rate hikes may keep a rally in check.