5 Stocks Made Up 52% of the S&P 500 Rally

The S&P 500 is up about 2.1% in the month of October — its best month since February of this year. But it wasn’t an even rally in the market.

The S&P 500 is up about 2.1% in the month of October — its best month since February of this year.

But it wasn’t an even rally in the market.

For example, the technology sector accounted for more than 75% of the gain. In fact, just five stocks (four tech stocks and one consumer discretionary stock) made up 52% of the entire S&P 500 rally.

Facebook was up 15.5%. Apple was up 8.2%. Google was up 6.1%. Microsoft was up 6%. And the lone consumer discretionary stock, Amazon, was up 12.5%.

To put this in perspective with the rally in February, we can look at the S&P 500 on an equal-weighted basis. Since the S&P 500 is a market capitalization weighted index, the biggest stocks by market cap have a greater influence. With an equal-weighted index, all the stocks have the same impact.

Take a look:

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The S&P 500 is up about 2.1% in the month of October — its best month since February of this year. But it wasn’t an even rally in the market.

In February, the difference was minimal, just a few percent off.

But in October, the gain was less than half the normal S&P 500.

The S&P 500 is up about 2.1% in the month of October — its best month since February of this year. But it wasn’t an even rally in the market.

That means the health of the rally is not as strong as it looks on the surface, since just 1% of the stocks made up 52% of the rally.

The rest of the market will have to carry the weight now. It’s time to see how 99% of the stocks in the S&P 500 perform through the end of the year — do they follow the Big Five in October or continue to basically trade flat?

I’ll keep you posted.

Regards,

Chad Shoop, CMT
Editor, Automatic Profits Alert

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