Two weeks ago, Goldman made a surprising finding: as of July 1, just one stock alone was responsible for more than a third of the market's YTD performance: Amazon, whose 45% YTD return has contributed to 36% of the S&P 3% total return this year, including dividends. Goldman also calculated that the rest of the Top 10 S&P 500 stocks of 2018 are the who's who of the tech world, and collectively their total return amounted to 122% of the S&P total return in the first half of the year.
And another striking fact: just the Top 4 stocks, Amazon, Microsoft, Apple and Netflix have been responsible for 84% of the S&P upside in 2018 (and yes, these are more or less the stocks David Einhorn is short in his bubble basket, which explains his -19% YTD return).
Now, in a review of first half performance, Bank of America has performed a similar analysis and found that excluding just the five FAANG stocks, the S&P 500 return in H1 would have been -0.7%.
FAANGs aside, here are the other notable sector observations about a market whose leadership has rarely been this narrow:
- Only three sectors outperformed in the 1H (Discretionary, Tech and Energy). Meanwhile, Staples and Telecom were the worst-performers in the 1H.
- Energy staged the biggest comeback in 2Q to become the quarter's best-performing sector after turning in among the worst returns in 1Q.
- Industrials and Financials notably underperformed in June, the 2Q, and the 1H while Discretionary and Energy outperformed in all three.
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Originally Posted by Zippyjuan
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