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

Audi EV Sales Teach Us About Demand and The Used-Car Market.

Milena

Audi EV Sales Teach Us About Demand and The Used-Car Market.

The German Auto USA sold 4,438 Audi EVs in the first quarter, up from 3,247 sold in the first quarter of 2022 and up from 4,257 sold in the fourth quarter of 2022.

Companies
Microsoft_Is_Bringing_Call

Milena

Microsoft Is Bringing Call of Duty to Nintendo, Putting Sony on Notice.

Microsoft is attempting to calm antitrust worries over its planned $75 billion acquisition of Activision Blizzard. Let's see what the situation is about.

Companies
Get the ultimate solution: B2BinPay Get the ultimate solution: B2BinPay
Sponsored
Liquidity Provider

What Is Liquidity?
Let's find out what Liquidity is, the Importance of Market Liquidity, What Are the Most Liquid Markets, and who provides Liquidity.

discover
Data Tokenization: A Shield for Your Sensitive Information

Nato

What is Data Tokenization, and How Does it Protect Your Sensitive Information?

Data breaches are a constant threat. Discover how data tokenization offers a powerful solution for enhancing data security and protecting sensitive information.

Fintech
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

    Constantine

    Best DAO Projects in 2025

    Best DAO projects in 2025

    Alexander

    Crypto Nodes That Pay: Your 2025 Guide to Top Passive Income Opportunities in Crypto

    crypto nodes that pay

    Alex

    Pi Network: Scam or Groundbreaking Crypto? The Full Analysis

    Pi Network Explained

    Constantine

    Triple Net Lease: Meaning, Benefits, and Strategies Explained

    Triple Net Lease

    Constantine

    Hanging Man Pattern: How to Identify and Trade It Effectively

    Hanging Man Pattern

    Alex

    5 Infinite Banking Mistakes That Could Cost You Thousands

    Infinite Banking Mistakes to Avoid

    Aleksander

    Solana Firedancer: Solving Solana’s Biggest Problems with a New Engine

    Solana Firedancer explained

    Alexander

    What Is an Interest Coverage Ratio? How to Use This Financial Metric to Evaluate Company Health

    Interest Coverage Ratio Explained

    Hazem

    After-Hours Trading: Can You Trade After Financial Markets Close?

    After-Hours Trading Explained

    Alexander

    How to Scale a Crypto Exchange Business and Stay Competitive

    how to scale crypto exchange business

    Constantine

    Crypto CrypticStreet Review: The Future of DeFi and Secure Crypto Trading

    Crypto CrypticStreet Review: The Future of DeFi and Secure Crypto Trading

    Alexander

    Bitcoin Power Law Explained: How It Shapes BTC’s Long-Term Growth

    Bitcoin Power Law Explained: How It Shapes BTC’s Long-Term Growth

    Hazem

    Megaphone Pattern​: What Is It? How to Use It In Trading

    Megaphone Pattern​: How to Read & Trade with It

    Constantine

    Top 5 Liquidity Bridge Providers in DeFi

    Top 5 Liquidity Bridge Providers in DeFi

    Hazem

    Max Funded IUL Explained: Is It a Legitimate Financial Strategy?

    Understanding Max Funded IUL

    Alexander

    Tax Refund Timeline: When Will You Get Your Tax Return?

    how long does it take for tax refund

    Constantine

    Crypto Liquidity — What is it, and How to Measure It?

    What is Crypto Liquidity and How to Measure It?

    Constantine

    AI in Finance: A Game-Changing Trend Shaping the Industry

    AI in Finance

    Hazem

    5 Ways to Make Money with ChatGPT and Build Your Wealth

    Make Money with ChatGPT

    Constantine

    Top AI Companies to Invest in April 2025

    Top AI Companies to Invest in March 2025

    DeepSeek vs ChatGPT: Which AI Technology is Better For You?

    DeepSeek vs ChatGPT: Feature-by-Feature AI Tool Comparison

    Constantine

    Top Solana Meme Coins in 2025: Best Presales and Where to Buy

    Solana Meme Coins 2025

    Alexander

    How Renewable Energy Stocks Can Supercharge Your Portfolio

    How Renewable Energy Stocks Supercharge Your Portfolio

    SEC Crypto Regulations: What Financial Advisors Need to Know

    SEC Crypto Regulations: Insights for Financial Advisors
    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.