These 17 Stocks Are Boosting The Market, Why Investors Should Beware

    1. Of the S&P’s nearly 18% return this year (through November 6), half of it was generated by only 17 stocks. More than half of those stocks were tech companies.  I am sure you are familiar with the names.  These 17 stocks make up 24% of the S&P’s total market capitalization, which helps explain their influence on the market.  But one thing I remember well from the years that followed 1999 is that the market leaders on the way up led on the way, down, but that the rest of the market did OK for a while.  That is something I am watching very carefully as the calendar prepares to turn after next month.
      YCharts 2017
  • The next group of stocks (33 of them) contributed another quarter of the S&P 500’s return so far this year. So, that’s 50 stocks accounting for ¾ of the “market” gains.  The other 90% of the S&P 500 had a very small contribution to the effort.  Tech stocks were well-represented in this bracket as well, though not as much as the first group of 17 companies.
  • So, did the other roughly 450 companies in the S&P 500 account for the rest of the index’s gain this year? No, 139 of them did, though.  That’s the third line in the table.  Those stocks accounted for the remaining ¼ of the index’s gains so far this year.  Tech stocks were part of it, but as you can see, the further down the list you go of major contributors to the market gain this year, the less impact that the technology sector has.
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