SUMMARY
- Markets have been performing relatively well this year. Overall, the S&P 500 is up 9.9% year-to-date. However, this perceived market strength is not indicative of the average public company’s performance. Instead, a handful of stocks—Meta, Apple, Microsoft, Amazon, Nvidia and Alphabet—have been driving market strength.
- These six companies, collectively known as Mega Cap Tech, now represent a combined 24% of the S&P 500. Microsoft and Apple alone account for nearly half of this year’s gains, and together, the two companies make up 14.1% of the S&P 500. Apple’s weighting, at 7.4% of the S&P 500, is the largest for any single company since at least 1980. Collectively, Mega Cap Tech has experienced a 59.7% year-to-date increase.
- In contrast, small and micro-cap stocks have been battered by the uncertainty surrounding the ongoing banking sector turmoil and the future of the Fed’s monetary policy. Debt dynamics, higher borrowing costs expected for an extended period, and the potential for a looming credit crunch put additional pressure on smaller companies, which is reflected in their performance. U.S. small-cap stocks have only increased by 1.3% year-to-date, while U.S. micro-cap stocks have declined by 2.5% this year.
DISCLOSURES
The material shown is for informational purposes only. Any opinions expressed are current only as of the time made and are subject to change without notice. This report may include estimates, projections or other forward-looking statements; however, forward-looking statements are subject to numerous assumptions, risks, and uncertainties, and actual results may differ materially from those anticipated in forward-looking statements. As a practical matter, no entity is able to accurately and consistently predict future market activities. Additionally, please be aware that past performance is not a guide to the future performance of any investment, and that the performance results and historical information provided displayed herein may have been adversely or favorably impacted by events and economic conditions that will not prevail in the future. Therefore, it should not be inferred that these results are indicative of the future performance of any strategy, index, fund, manager or group of managers. The graphs and tables making up this report have been based on unaudited, third-party data and performance information provided to us by one or more commercial databases. While we believe this information to be reliable, SpringTide Partners bears no responsibility whatsoever for any errors or omissions.
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