Nasdaq Rebalance Takes Shape With Earnings Underway

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The Nasdaq rebalance has shown itself throughout the week, but come Friday it will be in full swing. Despite not posting a lot of details of the 'special rebalance' and not wanting to copy what everyone else has, I decided to share Reuters' story — because the situation is unique and interesting.

The long and short of this is there is too heavy of a concentration of big name tech stocks in the Nasdaq 100 that make up almost half of the weighting of the index. I actually remember the other two times this happened in 1998 and 2011.

I think they started rebalancing late last week and for sure we have seen a lot of it so far this week, but the big reveal will be on Monday to find out what the new weightings are.

“A blistering rally in growth and technology stocks has lifted the Nasdaq 100 index by 37.5% this year. That compares with a 14.8% gain for the benchmark S&P 500...Microsoft, Apple, Nvidia, Amazon and Tesla combined account for 43.8% weight in the index, according to Refinitiv data as of Monday's close. As part of the rebalance that will come down to 38.5%.

Wells Fargo index strategists estimate Starbucks, Mondelez, Booking Holdings, Gilead Sciences, Intuitive Surgical, Analog Device and Automatic Data Processing will see their weight increase in the Nasdaq 100 index.”