Five stocks support the S&P 500, Goldman Sachs: still speculate in high-growth, high-margin stocks
$S&P 500 Index (.SPX.US)$ $Goldman Sachs (GS.US)$ Goldman Sachs recently released a report stating that the breadth of the stock market has narrowed sharply. Historically, stock market returns have been lower than average and have fallen sharply.
Chief U.S. equity strategist David Kostin said, “Since the end of April, five stocks have accounted for 51% of the S&P 500’s return. $Microsoft (MSFT.US)$, $Alphabet-A (GOOGL.US)$, $Apple (AAPL.US)$ , $NVIDIA (NVDA.US)$ and $Tesla (TSLA.US)$ together accounted for more than one-third (920 basis points) of the S&P 500’s year-to-date return of 26%."
"After contributing twice its initial weight to the index, these stocks currently account for 22% of the S&P 500's market capitalization, an increase of 4 basis points from the beginning of this year." Kostin added.
Kostin believes that after a period of similar market breadth, "stocks have historically shown lower-than-average returns and greater shrinkage." "Historically, it usually takes another 4 months before the breadth of stocks With continued growth, market leadership will shift to the previous laggards." "The record index concentration is both the reason and the symptom of a narrow market."
"In the past 7 years, the market value weight of the 10 largest stocks in the index has been rising, and now it has reached 31%, at least the highest level since 1980."
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