The Nasdaq 100 Index has rallied this year, helped by the ongoing tailwinds in the artificial intelligence industry. It ended the week at $24,500 after soaring by 50% from its lowest level this year. This article explores the top catalysts for the index and its ETFs like QQQ, QQQM, and JEPQ.
ES Sports buyout by Silver Lake and PIF
One of the most important catalysts for the Nasdaq 100 Index and its ETFs is the potential buyout of EA Sports by a group of investors, including Silver Lake, Affinity Partners, and Saudi Arabia’s PIC in a deal worth about $50 billion.
If this deal happens, it will be one of the biggest leveraged buyout ever. It will also be a sign that there is demand for companies at a time when dealmaking has slowed.
EA Sports has faced pressure in recent years, culminating in mass layoffs earlier this year following the publication of weak financial results.
US government shutdown
The other major catalyst for the Nasdaq 100 Index and its ETFs, like QQQ and JEP, are the potential government shutdown in the United States.
This shutdown will occur due to ongoing differences between Republicans and Democrats regarding how to fund the government.
Republicans want a clean spending package, while Democrats are using their leverage to push for healthcare subsidies and Medicaid funding.
In most cases, a government shutdown does not have a major impact on the Nasdaq 100 and other indices because it is often resolved.
US non-farm payrolls data
The most important macro news that will impact the Nasdaq 100 Index this year is the upcoming jobs numbers.
The Bureau of Labor Statistics will publish the latest JOLTs job vacancies numbers first. These numbers will provide more color on the labor situation in the US.
ADP, the biggest payrolls company in the US, will publish the latest private payroll data on Wednesday, while the BLS will release the closely-watched NFP data on Friday.
Economists expect the upcoming report to show that the economy added just 39,000 jobs in September as the unemployment rate remained unchanged at 4.3%. They also expect a downward revision of the August payrolls numbers as it has happened in the past few months.
A weak jobs report will be a good thing for the Nasdaq 100 Index and its ETFs because it will renew the hopes of interest rate cuts by the Federal Reserve.
Several Fed officials have warned that more cuts will have a major impact on inflation, which has remained higher than the 2% target in the past few months.
A report released on Friday showed that the headline Personal Consumption Expenditure (PCE) data rose to 2.7%, moving further from the 2% target.
There will also be important macro data this week, including the upcoming US consumer confidence and PMI numbers, which will shed more information about the economy.
No major companies in the Nasdaq 100 Index will publish their earnings this week. The only major ones to watch will be Paychex and Nike.
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