Did you just watch as the Nasdaq jumped nearly 40% in the first half — adding $5 trillion to investors' portfolios? Don't worry — you're likely to get another shot at it, say stock market predictions.
An Investor's Business Daily analysis shows a good first half for the Nasdaq is usually followed by another good half. And that's a reassuring thought. Stocks that dominate the Nasdaq like Apple, Microsoft and Nvidia are already up huge. Just these three stocks added $2.4 trillion in market value in the first half, says data from S&P Global Market Intelligence. The Nasdaq is off to its best year in more than two decades.
But history says more gains are likely on the way. "Stocks are off to an impressive start this year, and history suggests the bullish momentum could continue into the second half," said Adam Turnquist, chief technical strategist for LPL Financial.
Stock Market Predictions: Good First Half, Good Second
Stats pointing to a solid second half for tech stocks after a good first half are strong. It's been the tendency for years. And it's consistent with the S&P 500.
The Nasdaq rose 10% or more in the first half nine times since 2000. Those are definitely unusually large gains. And the first half gain of 38.7% in 2023 qualifies. That's the Nasdaq's best first half since at least 2000.
But years with monster first halves only kicked off more gains. The Nasdaq added an additional 15.3% on average in the second half in those same years. And it's not just a few lucky years. The Nasdaq gained in the second half, following a 10%-plus gain in the first half, more than three quarters of the time.
Looking At Past Second Halves For Nasdaq Stocks
Looking for a historical precedent? Consider 2003 for stock market predictions.
In that year, the Nasdaq boomed 22.9% in the first half of 2003. Many investors thought the rally was too much, too soon. After all, the Nasdaq collapsed in 2002 and 2001. Tech stocks were clawing their way out of the dot-com bubble.
But what happened in the second half of 2003? The Nasdaq rallied by almost as much: 21.7%. And this is very typical of the Nasdaq. The tech-stock-heavy index gained 12.3%, 26.7% and 13.9% in the second halves of 2021, 2020 and 2019, respectively, despite jumping more than 10% in the first half of each of those years.
Another Half Like This Would Be Epic
Just getting the first half of 2023 to repeat itself would be a big win. Some of the Nasdaq stock gains are larger than life.
Apple became the first company valued at $3 trillion. It alone gained $975 billion in market value in the first half. Microsoft, fanned by AI enthusiasm, was a close No. 2, gaining $746.1 billion. And then there's Nvidia, which joined the trillion-dollar club by adding $688.4 billion in market value in the first half.
Could history repeat itself? If so, you're not going to hear many complaints from investors.
Stock Market Predictions: Good Things Come In Pairs
How the Nasdaq has done in years of 10% or higher first-half gains
| Year | Gain in 1st half | Gain in 2nd |
|---|---|---|
| 2003 | 22.9% | 21.74% |
| 2007 | 10.29 | 7.61 |
| 2009 | 22.33 | 25.76 |
| 2012 | 14.92 | 1.51 |
| 2017 | 16.17 | 13.16 |
| 2018 | 10.2 | -10.13 |
| 2019 | 21.06 | 13.85 |
| 2020 | 16.46 | 26.71 |
| 2021 | 12.97 | 12.25 |
| 2023 | 38.7 | ? |
Sources: IBD
Follow Matt Krantz on Twitter @mattkrantz
