16/07/2023
Only about a half-dozen companies are responsible for virtually all of the market advance, leading to a lot of investor angst over how precarious the gains feel. But it’s possible to look at the same set of facts and conclude that nothing has changed in the market over the past 18 months.
● The symmetry is weirdly precise: Although the Nasdaq-100 badly trailed the broader market in 2022, plunging 33% while the S&P 500 fell 19%, the two benchmarks are almost exactly even when measured from the start of 2022: down about 7%. In other words, if you hung on to tech stocks through the past 18 months, you had a volatile ride but ended up where you would have in a broad index fund.
● Earnings projections go a long way in explaining the turnaround. After shrinking last year, profits for the five biggest companies in the S&P 500— Apple, Microsoft, Google parent Alphabet, Amazon.com and Nvidia—are projected to rise 16% in the quarter that ended in June and accelerate in each of the next two quarters, according to data compiled by Bloomberg Intelligence.
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