Perspectives Quarterly Newsletter: Q2 2024
Strong June S&P 500 performance saved what was, to that point, a lackluster quarter. Building on the first quarter, the index finished the first half of 2024 with 31 record closes, as the market seemed to easily digest any exogenous events. While the headline return for the S&P 500 was certainly attention grabbing, looking deeper at the drivers of the returns showed a notable trend: For the first half of the year, the 10 largest stocks in the index were responsible for 73% of the total gain (11.13% of the 15.29%). For the second quarter, the concentration became even more pronounced as the 10 largest names returned 5.60%, meaning the other 490 stocks in the index had a negative total return for the quarter as a group. With growth names dominating the list of largest companies, it follows that the Russell 1000 Growth index handily outperformed the Value index. Weakness continued down the capitalization scale, with the Russell Midcap and 2000 indices both posting negative returns for the quarter. Internationally, the EAFE index joined in the negative returns while Emerging Markets set themselves apart and actually bested the S&P 500 in Q2. After a roaring start to the year, some of the air came out of the Bitcoin balloon.
