This article is a reprint from “Toushiru” provided by Rakuten Securities, “Understanding in TOP 3 Minutes! Today’s Investment Strategy”. Today’s point The recovery of the Nasdaq market is clear in the US market GAFAM’s total market capitalization exceeds 1000 trillion yen Diversified investment in Nasdaq using index funds Kagawa, Chief Global Strategist of Rakuten Securities Economic Research Institute I would like to introduce Mr. Mutsumi’s view. The Nasdaq market recovers sharply in the US market This week, the Nasdaq Composite Index and the Nasdaq 100 Index hit record highs in the US market, following the S & P 500 Index (July 7). Nasdaq, which is centered on major high-tech stocks, has often had a heavy upside due to the impact of rising long-term interest rates since February. However, since June, long-term interest rates have been on a downward trend and have recently fallen to the 1.3% level. While reflation expectations were mostly factored in, the return of funds to the Nasdaq stock, which symbolizes growth stocks (growth stocks), boosted the market average (S & P500 index) in place of value stocks (economically sensitive stocks) that lost momentum. ing. Chart 1 shows the transition of the Nasdaq 100 Index and the S & P 500 Index starting from the beginning of 2020. The Nasdaq-100 Index has higher volatility than the market average, but remains dominant in terms of returns. The top five companies by market capitalization in the Nasdaq 100 Index are called “GAFAM” (Google, Apple, Facebook, Amazon.com, Microsoft), and their market capitalization has reached over 1,000 trillion yen in total. GAFAM overlaps with the top five companies in the S & P 500 index, and it can be seen that the Nasdaq’s turn to demodulation contributed to the renewal of the S & P 500 index’s highs. While the “optimal market” where economic normalization (economic recovery) and low interest rates coexist will support the firmness of US stocks, depending on the April-June financial results and guidance (performance outlook) to be announced in the future, Nasdaq’s main stocks will May play a leading role in US stock prices.