(Tuesday, Oct. 13, 2020; 10:30 PM EST) The six tech giants that have dominated stock performance in 2020 were less dominant over the last three months. The stock market rally broadened.
The stock market's performance was almost entirely determined by six companies in the S&P 500 in the first nine months of 2020: Facebook, Amazon, Apple, Netflix, Google, and Microsoft (FAANGM).
However, in the last three months, the 494 other companies in the Standard & Poor's 500 index outside of the FAANGM, kept up with the FAANGM.
Note the gap between the indexes, with the market-capitalization weighted S&P 500 far outperforming an equal-weighted index of the same 500 companies. This gap was unusual, out of line with the historic norm.
However, the performance gap between the market-cap weighted S&P 500 and the equal-weighted S&P 500 closed last quarter.
While the six giant tech companies often referred to as the FANG stocks on the S&P 500 performance have probably not been defanged, the broadening of the stock market rally in the past three months to the other 494 companies in the index may make the stock market a bit less frightening.
Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. It does not take into account your investment objectives, financial or tax situation, or particular needs. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences.
The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions.
Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. The material represents an assessment of financial, economic and tax law at a specific point in time and is not a guarantee of future results.
This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.
Financial planning provided by Williams Advisory Services, LLC, a Registered Investment Adviser.
This message is intended for the use of the person(s) to whom it is addressed.
It may contain information that is privileged, confidential, proprietary, and/or exempt from disclosure under applicable law