S&P 500 ETF Enters Bull Market: 5 Best-performing Stocks in SPY

To the Moo joined discussion · Jun 12, 2023 21:16

The S&P 500 entered a new bull market!

$S&P 500 Index(.SPX.US)$ entered a new bull market, ending the longest bear streak since the 1940s.

The surge in mega-cap tech stocks, easing inflation, stronger-than-expected corporate earnings and hopes that the Fed is nearing the end of its interest rate-hike cycle have helped the index to recover from the lows seen in October of last year.

Nearly half the stocks in the index have declined, with most of the winners concentrating on the tech sector with just a small group of stocks, including $Apple(AAPL.US)$, $Microsoft(MSFT.US)$, $NVIDIA(NVDA.US)$, $Alphabet-A(GOOGL.US)$, $Amazon(AMZN.US)$, $Meta Platforms(META.US)$ and $Tesla(TSLA.US)$.

Bank of America strategist Michael Hartnett calls these stocks the “Magnificent Seven,” which accounted for 90% of the gains in the S&P 500 so far this year.

The artificial intelligence (AI) boost has also pushed $Marvell Technology(MRVL.US)$, and $Advanced Micro Devices(AMD.US)$higher.

Apart from the tech sector, $Royal Caribbean(RCL.US)$made it to the top five best-performing stocks on the index.

Additionally, corporate America’s shift of focus to structural benefits and booming AI will continue to drive the stock market higher.

Further, an improving earnings picture and hopes of easing policy should also aid the S&P 500. According to CMEGroup's Fedwatch tool, markets are pricing in a 65% chance that the Fed will pause its historic interest rate hiking campaign in the June meeting.

Most Wall Street analysts recently raised their target price on the S&P 500 this year for the second time in many weeks.

The equity strategy team at RBC Capital Markets raised its year-end price target on the index to 4,250 from 4,100, while Bank of America gave a call for the S&P 500 to hit 4,300 by the end of the year.

SPY jumped about 12%^.

^% change from 01/03/2023 - 06/09/2023, moomoo app

S&P 500 ETF Enters Bull Market: 5 Best-performing Stocks in SPY

Let’s take a closer look at the fundamentals of $SPDR S&P 500 ETF(SPY.US)$.

SPDR S&P 500 ETF Trust holds 503 stocks in its basket, with each accounting for no more than 7.4% of assets. This suggests a nice balance across security and prevents heavy concentration.

The fund is widely spread across sectors with information technology, healthcare, financials and consumer discretionary accounting for a double-digit allocation each.

SPDR S&P 500 ETF Trust has AUM of $402.2 billion and charges 9 bps in fees per year.

The product trades at a heavy volume of around 68 million shares a day on average, ensuring higher liquidity with a tight bid/ask spread, leading to lower trading costs for investors.

Five Best-performing Stocks in SPY

$NVIDIA(NVDA.US)$ is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU.

The stock has jumped 163.5% so far this year, and its earnings are expected to grow 123.3% for the fiscal year (ending January 2024).

$Meta Platforms(META.US)$ is the world’s largest social media platform. The company’s portfolio offering evolved from a single Facebook app to multiple apps like photo and video sharing apps, Instagram and WhatsApp owing to acquisitions.

The stock has surged 120% so far this year.

$Tesla(TSLA.US)$ is the market leader in battery-powered electric car sales in the United States, with a roughly 70% market share.

The stock has gained 90.7% this year and has an expected earnings growth rate of 32.5% for next year.

$Advanced Micro Devices(AMD.US)$ has strengthened its position in the semiconductor market on the back of its evolution as an enterprise-focus company from a pure-bred consumer-PC chip provider.

The stock has rallied 86.9% so far this year.

$Royal Caribbean(RCL.US)$ is a cruise company. It owns and operates three global brands — Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises.

The stock has gained 82.6% so far this year.

Source: Yahoo Finance, 09 June 2023

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