Wednesday, June 5, 2024 9:40 PM EST
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Stocks finished mostly higher as the Nvidia craze continued to drive a bigger wedge between the indexes with and without Nvidia. As of today, Nvidia accounts for about 42% of the gains in the Nasdaq 100, and what is surprising is the split between the 62 advancers and the 42 decliners on the year. It was closer than I would have guessed.
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At this point, Nvidia and Meta account for just a bit more than 50% of the index’s gains. So we hear about the market going up, but is the market going up, or is Nvidia going up? Is Nvidia just happening to drag names like Meta and Broadcom up with it? Through Broadcom into the mix, we are talking about nearly 60% of the gains coming from just three stocks.
So, sitting here and trying to stare at the chart and do an Elliot wave or some kind of other analysis seems kind of pointless when just three stocks can dominate the way these three have. If you throw Microsoft and Amazon into the mix, we are probably talking about 80% of all of the gains in the index coming from just 4 or 5 stocks.
This is probably why the Nasdaq 100 equal-weight index is up just 5% on the year, compared to the NDX market cap-weighted index, which is up 14% on the year.
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Charts used with the permission of Bloomberg Finance L.P. This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and ...
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Charts used with the permission of Bloomberg Finance L.P. This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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