In this Stockhead series, Josh Gilbert – market analyst at global investment platform eToro – gives investors the scoop on all things Nasdaq related; the key market themes, along with popular investment trends based on eToro’s data and insights.

Interest rates and inflation remain the focus for Nasdaq investors, but geopolitical concerns have added uncertainty to markets over the past week, with volatility returning.

The Nasdaq 100 remains in correction territory, with the index down 10.5 per cent so far this year.

Interest rates — the latest

The latest Federal Reserve minutes this week showed officials concluded they would start raising interest rates soon, and that they would be on the lookout for persistent inflation that could justify faster tightening.

This follows comments from Fed President James Bullard, who called for a more aggressive approach to raising interest rates.

That in turn has raised concerns about an emergency rate hike before the March meeting, but we feel it is unlikely because it contradicts Fed Chair Jerome Powell’s broader approach.

There is still time for the economic situation to change between now and the two-day Federal Reserve meeting beginning on March 15.

Prior to that, investors will be on the lookout for the February jobs report, and one more monthly CPI print before the Fed’s next all-important meeting.

Nasdaq earnings season

US earnings season has been strong, with the S&P500 reporting earnings growth of more than 30 per cent.

And while the broader Nasdaq is still lower on the year, the tech sector has stood out.

Also nine in 10 (87 per cent) of US tech companies have so far delivered earnings above estimates — the highest across all 11 sectors.

Some of the names that stood out over the past week were Airbnb and Nvidia, who both delivered earnings above expectations with solid forward guidance.

Despite the Omicron variant creating waves throughout the world in Q4, Airbnb saw its nights and experiences sector climb by 58 per cent year-over-year.

Not only was this significantly higher than in Q4 2019, but it demonstrates that people are becoming less concerned about COVID-19 and are eager to travel again.

Heading into Q1, Airbnb may set a record number of quarterly stays, illustrating its resilience against the pandemic once again.

Given its lofty valuation, Nvidia’s expectations were high for another strong quarter of growth, and it delivered earnings to match.

Nvidia’s Data Center revenues were the standout for growth, up 71 per cent year-over-year, as demand for AI technology continues to accelerate.

The market’s biggest trends appear to be playing perfectly into Nvidia’s hands.

From gaming, the Metaverse and self-driving vehicles, Nvidia is currently sitting comfortably front and centre.

Cutting through the noise

The volatility from markets in recent weeks has masked strong tech earnings.

So although we may continue to see short term weakness, corporate profits are strong and consistently resilient.

We see attractive ‘correction’ opportunities in the strongest and cheapest, especially now bond yield risks are better priced.

Investors will generally rotate out of perceived risky assets when uncertainty arises, which is now the case with the geopolitical tensions.

As a result, we may see short term weakness from risk assets, with disruptive tech likely to come under pressure.

However, most geopolitical crises have had minimal long-term global market repercussions in the past.