More recently, cracks are also starting to appear in Apple's strong iPhone facade as sales dropped in China.īesides currency risks, there are concerns about higher prices for goods and services caused by high inflation hampering demand throughout the U.S. This coincided with the trough in the value of QQQ as shown in the introductory chart. Thus, companies like Microsoft have been warning about potential Forex-related earnings risks since June.
Moreover, the Federal Reserve raising rates also mean that the greenback becomes pricier vis a vis the local currencies of countries where American companies operate, in turn constituting headwinds for QQQ's holdings when depreciated euro revenues reach dollar-denominated income statements. As such, they are also impacted by economic conditions abroad, namely in Europe where a potential slowdown should be more acute than in the U.S. QQQ Top Holdings (These are multinationals that span the whole globe. As such, it contains the most valuable publicly listed names in the world like Apple ( AAPL), Microsoft ( MSFT), and Tesla ( TSLA) as shown in the diagram below, with 97.56% of its assets dedicated to the U.S. Factors Driving Down the Nasdaqįirst, QQQ tracks the Nasdaq-100 Index, which encapsulates the 100 largest non-companies listed on the Nasdaq based on market cap. At the same time, building on the trend-based analysis for the Invesco ETF together with daily price variations, I will also show that the ProShares UltraPro QQQ ETF ( NASDAQ: TQQQ) is becoming less attractive for the day trader, but can still be used to profit from an uptrend in the Nasdaq.įor this purpose, I start by elaborating on the recent market drivers.
The objective of this thesis is to assess whether, after such a drop, there are still ingredients that can drive QQQ to yet another bounce. Had it not been for energy stocks, the SPDR S&P 500 ETF Trust ( SPY ) could have fared worse with the Nasdaq having also been weighed down by the semiconductor stocks it holds. The stock market is in turmoil with the S&P 500 down by 17.7% during the last year, but the tech-heavy Invesco QQQ Trust ( NASDAQ: QQQ) is down by 26.7%.
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