5 Giant Stocks Are Driving The S&P 500 To Records: Goldman Sachs

Dec 13, 2021

5 Giant Stocks Are Driving The S&P 500 To Records: Goldman Sachs

Even though the markets have reached new highs, the rise has continued, owing primarily to the robust performance of just a few big companies.

According to Goldman Sachs's analysis, five stocks represent 51% of the S&P 500's performance since April. These five companies are Microsoft, Google, Apple, Nvidia, and Tesla. They made more than one-third of the S&P 500's 26% gain this year.

While this was happening among these well-known tech companies, David Kostin, Goldman Sachs chief U.S. stock strategist, sees diminishing market breadth (or fewer stocks to go up) beneath the surface as a critical threat in the near term. Kostin pointed out that stocks have historically delivered lower-than-average returns and suffered harsher declines after times of dramatically decreased market breadth, such as the current situation.

There have only been 11 occasions since 1980 when the market breadth has closed as much in a six-month period as it did between this year's April and October. Having observed most of these instances, Kostin shows that the S&P 500 returns were below average for one, three, six, and 12 months.

"Previous research indicates that changes in market breadth can be a good marker of stock market returns in the near term," Kostin states. Nonetheless, Kostin thinks stocks are ready to deviate from this historical pattern owing to a number of reasons.

The 'unknown unknowns' is a reason for the greatest drawdowns, and it is impossible to predict them in advance due to their nature. However, macroeconomic data implies that drawdown risks for the upcoming months would be substantial. Despite the difficulty of predicting one, the risk of recession looks to be minimal. Profit margins and earnings are still exceeding estimates. At the same time, despite nominal and real rates rising, they are still projected to be low over the next few months, helping valuations and stock demand, according to Kostin. The analyst is bullish about equities with high-growth potential.

Kostin says that these equities have fared well in previous months and should tend to do so if the decreasing breadth remains. Such companies sell to similarly high-growth corporations with low or negative profitability at a small premium. High margins are a significant indicator, signaling that these equities are likely to outperform their low-margin competitors in the current macroeconomic environment and the context of tighter financial circumstances.

Subscribe Our Newsletter

Bitcoin Analysis, The Next Target Is $77K
Bitcoin Analysis, The Next Target Is $77K

The news about the spread of the Omicron strain of COVID-19 hit markets around the world on November 26, including the cryptocurrency market. Meanwhile, the previous market crusher, the Delta variant, which now accounts for the biggest percentage of COVID-19 cases, is still widespread and not fully understood.

Crypto
When_To_Purchase_Micron

Milena

When to Purchase Micron Stock Despite Bearish News

Micron stock is falling as a result of the company's gloomy report. However, there are a few safe strategies to be aware of.

Companies
B2BROKER Liquidity B2BROKER Liquidity
Sponsored
Liquidity Provider

How to Identify Liquidity?
Let's find out how to identify Forex Liquidity, how to identify the liquidity of cryptocurrencies, and how to pick the best LP.

discover
Best DAO projects in 2025

Constantine

Best DAO Projects in 2025

Just a few years ago, DAOs were an experimental concept only crypto insiders talked about. Fast-forward to 2025, and these decentralized communities are shaping the future of finance, governance, digital identity, and even culture. From billion-dollar treasuries to funding public goods and pioneering new models of online collaboration, DAOs are doing what no boardroom ever […]

Blockchain
Contact us bg

Contact Us

Contact the Liquidity Provider
for any questions and advertising inquiries

    Please fill out this contact form to get in touch with us

    / 3000

    By clicking “Get in touch” button, you agree to the privacy policy

    Successful!
    Thank you for your request.
    We will contact you shortly.
    Close

    Сonstantine

    How to Choose the Right Liquidity Provider for Your Brokerage

    How to Choose the Right Liquidity Provider for Your Brokerage

    Сonstantine

    Low-Latency Trading Defined: Speed, Strategy and Technology

    Low-Latency Trading Explained

    Hazem

    How Liquidity Depth Affects Slippage in High-Volume Trading

    Liquidity depth and slippage in trading

    Hazem

    What is FIX API Liquidity Connection and How Does it Power Institutional Trading?

    FIX API in institutional trading

    Сonstantine

    OTC Trading Strategies and Technologies to Succeed in Over-the-Counter Markets

    OTC Trading Strategies

    Alexander

    What is OTC Trading? A Complete Guide for 2025

    what is OTC

    Alexander

    Synthetic Futures: A Trader’s Guide to Replicating Positions with Options

    How to Trade Synthetic Futures

    Сonstantine

    Order Book Depth: What It Is And Why It Matters?

    Order Book Depth What It is And Why It Matters

    Alexander

    Spot vs Perpetual Futures: Which Is Right for You?

    Spot vs Perpetual Futures explained

    Hazem

    5 Reasons Traders Are Switching to Perpetual Futures

    5 Reasons to Switch to Perpetual Futures

    Constantine

    Top 3 Liquidity Challenges Facing New Exchanges and How to Solve Them

    Top 3 Liquidity Challenges Facing New Exchanges Today

    Constantine

    Financial Planning in the Cryptocurrency Era — Master Crypto and Digital Asset Strategies

    Financial Planning in the Cryptocurrency Era

    Hazem

    Best Platforms to Trade Perpetual Futures in 2025

    Best platforms to trade perpetual futures in 2025

    Alex

    Top 10 Fintech Website Development Agencies for 2025

    Best Fintech Website Development Agencies for 2025

    Сonstantine

    Internal vs External Range Liquidity In ICT Trading Explained

    Internal vs External Range Liquidity In ICT Trading

    Constantine

    Portfolio Backtesting — Tools, Metrics, and Methods Explained

    Portfolio Backtesting

    Сonstantine

    ICT Trading Explained: Smart Money Concepts, Tools and Setups

    ICT Trading Explained

    Сonstantine

    CFD Trading Strategies: A Practical Guide to Risk and Execution

    CFD Trading Strategies

    Alexander

    What is a Fair Value Gap? A Guide to Trading Market Imbalances

    What is Fair Value Gap

    Vitaliy

    Triangle Patterns in Trading: Mastering Ascending, Descending & Symmetrical Strategies for Maximum Profit

    Triangle Patterns in Trading: Ascending, Descending & Symmetrical Guide

    Alexander

    What Is COTI? Payments, Token & Price Prediction

    What is a COTI coin

    Constantine

    Best Copy Trading Software in 2025

    Best Copy Trading Software in 2025

    Alex

    What Is an AI Agent? The Future of Finance Explained

    AI Agent Explained

    Constantine

    How to Start a Liquidity Provider Business?

    How to Start a Liquidity Provider Business
    liquidity-provider-logo
    • News
      • Stock Market Forecast
      • Stocks
      • Banks and Finance
      • Companies
      • Crypto
      • Forex
      • AI
      • Technology
      • DeFi
      • NFT
    • Articles
      • Crypto Payments
      • Trading
      • Crypto Exchange Business
      • Forex Business
      • Fintech
      • Liquidity
      • FinTech Awards
      • Blockchain
      • Investing
      • NFT
      • DeFi
    • More
      • Videos
      • Liquidity Providers List
      • Crypto Payment Providers
      • White Label Brokerage Platforms
      • Broker CRM Platforms
    [email protected]

    © 2024 Liquidity Provider. All Rights Reserved

    Privacy Policy Cookie Policy
    This site is registered on wpml.org as a development site. Switch to a production site key to remove this banner.