As we enter the third month of 2023, it’s a perfect time to examine the current state of the market.
In this evaluation, we’ll utilize the S&P 500 index, a well-diversified collection of blue-chip stocks, as a benchmark for assessing the US stock market.
Despite experiencing a correction over the last two weeks, the S&P 500 remains up by 2.9% from the beginning of the year until 1 March.
When it comes to sector performance, Communication Services (XLC) and Consumer Discretionary (XLY) have outperformed the rest with a remarkable return of more than 10% in the past two months.
On the other hand, Utilities (XLU) has been the weakest performer, declining by 9% over the same period.
Here are the list of SPDR Sector performances (from the best to worst):
- Communication Services (XLC) +12%
- Consumer Discretionary (XLY) +11%
- Technology (XLK) +9%
- Materials (XLB) +6%
- Financials (XLF) +4%
- Real Estate (XLRE) +3%
- Industrials (XLI) +3%
- Energy (XLE) -2%
- Consumer Staples (XLP) -4%
- Health Care (XLV) -7%
- Utilities (XLU) -9%
In 2023, there has been a significant shift in market trends, where sectors such as Energy, Consumer Staples, Health Care, and Utilities experienced a decline, while tech stocks represented by XLC and XLY have surged.
The optimism has been fueled by the expectation that the rate hikes in 2023 will be more moderate.
Among the S&P 500 stocks, Tesla (TSLA) emerged as the best performer, with a remarkable surge of 65% from the start of 2023.
Nvidia (NVDA) and Meta Platforms (META) were two other favorite stocks among investors and were up 55% and 44% respectively over the same period.
Below is a list of top 10 performing S&P 500 component stocks:
- Tesla (TSLA) +65%
- Discovery (WBD) +58%
- Nvidia (NVDA) +55%
- Catalent (CTLT) +53%
- Align Tech (ALGN) +46%
- Royal Caribbean (RCL) +45%
- Meta Platforms (META) +44%
- United Airlines (UAL) +39%
- Monolithic Power Sys (MPWR) +38%
- Wynn Resorts (WUNN) +36%
Moving on to the worst-performing S&P 500 stocks, Moderna (MRNA) was the second-worst performer, down 24% year-to-date. Pfizer (PFE) was down by 22% too. It appears that the pandemic fortune for these biotech companies has come to an end.
Below is a list of 10 worst performing S&P 500 component stocks:
- Lumen Technologies (LUMN) -38%
- Moderna (MRNA) -24%
- Baxter (BAX) -23%
- Pfizer (PFE) -22%
- Dish Network (DISH) -20%
- Enphase Energy (ENPH) -20%
- Molina Healthcare (MOH) -17%
- Centene (CNC) -16%
- Nextera Energy (NEE) -16%
- Northrop Grumman (NOC) -15%
So far this year, the number of gainers and losers in the S&P 500 index has been almost equal, with 297 gainers and 206 losers year-to-date.
The average gain for the gainers was 11%, while the average loss for the losers was 7%.
Recently, there have been renewed concerns regarding more rate hikes than previously expected, leading to a correction in the markets over the past two weeks.
According to current predictions, the peak fed fund rate could be in the range of 5.25% to 5.5%, which is higher than the earlier estimate of 5% to 5.25%.
As a result, the market is recalibrating to this new expectation. Currently, the S&P 500 index is still hovering above the 200-day moving average, and it is an important level to watch – as long as it stays above this point, there is still a chance for the bull to resume.
