Limited S&P 500 growth: for every strong performer there is usually an underperformer, and the banks are the culprits here - says IG Chief Market Analyst
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Companies shown in the chart (TSLA, NVDA, AMZN, GOOG and more) have increased significantly more than SPX itself YTD. Taking it into consideration, why the gain of SPX amounts to subtle 5%? Naturally, SPX is about 500 companies from various branches, but isn't it certainly about the banking sector weakening the index? What companies have underperformed recently weighing on the index performance? Let's hear from Chris Beauchamp, Chief Market Analyst at IG Group.
Source: TradingView
Chris Beauchamp, Chief Market Analyst at IG Group: The past week has seen an impressive rebound for indices, but it is the resurgence of tech stocks that has caught the eye. They led the charge lower in 2022, as rates rose and risk appetite evaporated, but with the banking sector in turmoil tech has once again become a remarkable safe haven.
Chris Beauchamp, Chief Market Analyst at IG Group: But for every strong performer there is usually an underperformer, and the banks are the culprits here. While no other bank has yet gone to the wall, there are still fears that others could follow SVB and Silvergate, which has meant that the Nasdaq continues to have the edge over its broader S&P 500 cousin. Other stocks linked to consumers have been something of a drag too, with Alphabet being a notable weakness over the past five days.
There are still fears that others could follow SVB and Silvergate
Chris Beauchamp, Chief Market Analyst at IG Group: Overall the rises appear to take place mostly in the cash session itself, but with indices around the globe still moving higher it seems that traders can find opportunities throughout the day if they wish to enter into positions to take advantage of this upward move, providing scope for the All Sessions markets that IG offers on certain US stocks.
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