The S&P 500 Index (SPX) has advanced an impressive 4.9% so far this year through Tuesday’s open, but that gain is driven by a relative handful of stocks, according the Financial Times. Just 50 stocks, or 10% of the index, delivered 80% of that gain, per analysis by Fundstrat Global Advisors cited by the FT. In fact, if you take out the top ten gainers, the S&P would be up only about 2%, Fundstrat head of research Thomas Lee told clients in a note on Monday, per the FT. This lack of breadth in the market is a source of concern for some market observers.
The Top Ten
Technology giants Apple Inc. (AAPL), Facebook Inc. (FB) and Amazon.com Inc. (AMZN), all three with YTD gains of 20% or more through Monday, account for roughly 33% of the total S&P gain, the Wall Street Journal adds. Three other tech leaders round out the top ten: Google parent Alphabet Inc. (GOOG), Microsoft Corp. (MSFT) and Oracle Corp. (ORCL).
The remaining four stocks may be surprising to some: tobacco company Philip Morris International Inc. (PM), drug and health products company Johnson & Johnson (JNJ), consumer products maker Procter & Gamble Co. (PG), and payments facilitator Visa Inc. (V).
Relative to a number of historical benchmarks, the S&P 500 is seriously overvalued right now, per a report from Bank of America/Merrill Lynch analyzed by Investopedia. (For more, see also: S&P 500 Overvalued on Almost Every Metric.)