Nasdaq Index Performance: December 2022
Performance in December across Nasdaq’s suite of indexes was broadly negative, with an average loss of 4.5% across 100 indexes in our index tracker; only 12 indexes registered positive price performance. In the attached report, the Nasdaq Featured Indexes highlight the breadth of the weakness across the high-growth, Tech-exposed Nasdaq Composite and Nasdaq-100, down 8.7% and 9.1%, respectively. While still negative, the Nasdaq-100 Equal Weighted Index’s loss of 6.6% was less severe, as was the Nasdaq-100 Ex-Tech Sector Index’s loss of 5.9%; both were aided by relatively better performance outside the biggest megacap tech names. The more midcap-exposed Nasdaq Q-50 and Nasdaq Next Generation 100 also fared a bit better, with losses of 5.8% and 5.3%, respectively. The Nasdaq Innovators Completion Cap Index, which tracks 200 of the most innovative, small-cap Nasdaq-listed names outside of the Nasdaq-100 and Nasdaq Next Generation 100, was down only 2.9%. The only positive performer in this group was the PHLX Gold/Silver Sector Index, eking out a gain of 0.1%.
Global Indexes Performance
Nasdaq’s Global Indexes tell a story of pronounced weakness across US Markets, with each of large cap, mid cap, and small cap down between 5.6% to 6.2%. Within Developed Markets, Europe outperformed with a gain of 0.3%. Emerging Markets were down only 0.6%, while Nasdaq’s Nordic Indexes were mostly down for the month with losses between 1-3%.
Dividend & Income Indexes Performance
Nasdaq’s Dividend & Income Index suite was also subject to broad-based weakness, with an average loss of 4.3%. The Nasdaq Select Canadian Preferred Share Index was the relative outperformer, down only 1.8%. The Nasdaq Technology Dividend Index was the worst, down 6.4%.
Dorsey Wright Indexes Performance
Nasdaq’s Dorsey Wright Indexes, driven by exposure to the momentum factor, fared a bit worse than the overall group, with an average loss of 5.5%. As with the Global Indexes suite, non-US indexes outperformed; within US, the Nasdaq Dorsey Wright Healthcare Tech Leaders Index was the best, down only 1.8%.
Green Economy Indexes Performance
While traditional Energy (i.e., Oil & Gas) has been outperforming most of this year, Green Economy Indexes have been underperforming after generating some of the strongest returns in 2020 and 2021. The broadest index in the group – Nasdaq OMX Green Economy – was down 8.8% last month, bringing its full-year loss to 29.2%. After some weakness earlier this year, the month’s overall top performer – Nasdaq OMX Wind – reversed a big chunk, gaining 9.5% in December and 35.2% in the fourth quarter.
Tech Suite Indexes Performance
Within Nasdaq’s Thematic suite of indexes, the Nasdaq Clean Edge Green Energy Index was the worst performer, down 19.9%, and worst overall. The ISE Clean Edge Global Wind Energy Index was the only positive performer for the month, up 1.6%. Other areas of relative strength included Nasdaq Junior Biotechnology down only 1.4%, and Nasdaq CTA Global Video Games & Esports, down only 0.6%. Many other indexes ranging from semiconductors and cybersecurity, to healthcare innovation and other areas of disruptive tech, were down between 5-10%.
Other Assets Indexes Performance
Finally, we round things out by highlighting that weakness across equities extended to other asset classes as well, including Options, Fixed Income, and Cryptocurrencies. Within Nasdaq’s Options suite, the Credit Suisse Nasdaq Gold FLOWS103 Index was the only positive performer, up 2.1%. In crypto, Nasdaq’s Ethereum Index underperformed, down 7.2%, while the broader Nasdaq Crypto Index was down 5.1%. In Fixed Income, losses were mostly halted in December, with marginal recoveries in US Investment Grade Corporate Bonds and Emerging Markets, but continued losses in US High Yield Corporates.
December Index Performance Summary
As the first half of 2022 wound down, we became hopeful for a near-term market recovery based on a few key factors: inflation rates potentially peaking and normalizing downward; less hawkishness from the Fed as a result; continued strength in some of the most important drivers of US economic growth (e.g. employment and consumer spending); historically attractive valuations and resilience across much of large-cap Tech. Rallies did occur in both July/August as well as in November, only to be foiled by repeatedly hawkish statements from the Fed, and a growing concern that a global recession in 2023 was becoming inevitable. As a result, the Nasdaq Global Index registered a decline of 19.7% for the full year, while the Nasdaq-100 ended with a loss of 33.0%; both saw their worst years of performance since 2008.
While the global economic outlook for 2023 remains highly uncertain, there are some who still believe a soft landing is possible, especially in the US where strong underlying fundamentals persist in large swathes of the economy. Inflation slowed noticeably in the second half of 2022, setting up the Fed to finally wind down its rate hikes. If the Fed is able to thread the proverbial needle and resist cooling the US economy into more than just a few months of flatlining or slightly negative GDP growth, a broad market recovery is likely to happen sooner rather than later.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Nasdaq Index Research Team
Nasdaq
Nasdaq calculates more than 40,000 diverse indexes, providing coverage across asset classes, countries and sectors.
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