Ford, Tesla, and Netflix are among the top performing stocks during the summer mega rally

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With the S&P 500 up 17% since its plunge in mid-June, big names like Ford, Tesla and Netflix were among the biggest gainers, while many energy and consumer stocks slumped despite a broad stock market rebound in recent months.

key facts

The benchmark S&P 500 index erased most of its losses from brutal selling in the first half of the year, having jumped 17% since its lowest point in the market on June 16 and recently posting four straight weeks of gains.

Stocks have rebounded in recent weeks thanks to growing optimism that inflation may have peaked after consumer prices calmed in July, raising hopes that the Federal Reserve will scale back its aggressive campaign to raise interest rates and tighten monetary policy.

The top-performing stocks on the S&P 500 rally since June 16 are Enphase Energy and e-commerce company Etsy, up 75% and 65% over that period, respectively.

Several software companies saw big gains as well, with the likes of Epam Systems up 57%, payroll service provider Paycom 49% and cloud networking company Arista Networks 46% higher.

Some well-known names have also seen a significant uptick in the past two months, including old car maker Ford (up 45%), electric car maker Tesla (up nearly 43%), and streaming giant Netflix (up 41%).

Other notable gainers in the S&P 500 include burrito chain Chipotle and digital payments giant PayPal – both up nearly 39%, as well as tech giants Amazon and Apple, up 37% and 34%, respectively.

Surprising fact:

Only 20 stocks in the S&P 500 have fallen more than 2% during the bear market rally since June 16, according to Bloomberg data.

What to watch:

The worst-performing stocks in the S&P 500 since the market’s lowest point this year are Colorado-based gold miner Newmont, down nearly 31%, and oilfield services company Baker Hughes, down 15%. Several energy companies led the market declines amid a drop in oil prices, which have fallen from a peak of around $120 a barrel in early June to nearly $90 a barrel today. Apache Corp., parent company of APA Corp., fell more than 13%, while Halliburton fell more than 11%, Philips shed 66% more than 7% and Marathon Oil 4%. Several consumer-focused stocks were also down, including Tinder-parent Match Group (down nearly 11%), Verizon (down 8%), Walgreens Boots Alliance (down 3%) and Johnson & Johnson (down 2%). %).

basic background:

A batch of better-than-expected economic data for July – including a strong jobs report and falling consumer prices – added to investor optimism about a possible peak in inflation. Many traders are later growing hopeful about the looming Fed pivot – as the central bank rolls back its aggressive monetary policy – although many experts warn that recent market gains are nothing more than a bear market rally. The Federal Reserve is planning more significant rate hikes until there is a significant reduction in inflation, indicating that it will “take some time” before monetary policy reverses, according to the minutes of the central bank’s latest policy meeting. Despite growing optimism among investors, many Wall Street analysts argue that more evidence of slowing inflation is needed before the Federal Reserve can reduce or reverse the pace of interest rate hikes and monetary tightening.

Critical quote:

“Stocks will likely struggle to get direction for the rest of the summer as Wall Street remains unsure how aggressive the Fed will be in September,” predicts Edward Moya, chief market analyst at Oanda. Traders are roughly evenly divided over whether the Federal Reserve will raise interest rates by another 75 basis points or 50 basis points smaller at its next meeting, according to data from CME Group.

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