It doesn't seem sustainable.
From CNBC, February 18:
- Just five stocks — Facebook, Amazon, Apple, Microsoft and Alphabet — account for the S&P 500′s year-over-year EPS growth, according to Goldman Sachs.
- “Mega-cap earnings strength contrasts with small-cap earnings weakness,” the firm’s analysts led by David Kostin said.
- The “FAAMG” basket accounts for 18% of the total S&P 500 value. The last time there was such high concentration among just 5 names was during the tech bubble. This time around, however, Kostin said the market is on firmer ground.
The stock market may be hovering around all-time highs, but just 5 companies are contributing to the S&P 500′s earnings growth, Goldman Sachs said in a new note.
After crunching the data from the 397 S&P components that have reported earnings so far this quarter, the firm found that “FAAMG” — or Facebook, Amazon, Apple, Microsoft and Google parent Alphabet — grew their fourth quarter earnings by 16% year-over-over.
Overall, the S&P’s fourth quarter earnings are up 2%, but all of that is thanks to the FAAMG stocks. Without these 5 stocks, the index’s year-over-year earnings growth is flat.
“Mega-cap earnings strength contrasts with small-cap earnings weakness,” the firm’s analysts led by David Kostin said in a note to clients. “The Russell 2000 experienced a 7% earnings decline during the fourth quarter, as many smaller firms posted weak top-line growth and had difficulty absorbing rising wages and other input costs.”.......MORE
Yesterday:
Ha! Speak of the (factor) Devil: "Is This The Start Of The Factor Crash That Morgan Stanley Has Been Warning About"
