Apple, Microsoft Dominate US Markets -- March 22, 2023

Link to The WSJ.

Not just tech, but "US markets."

The FAANG era is apparently over. The U.S. market is dominated by just two stocks now.

The combined weighting of Apple Inc. and Microsoft Corp. in the S&P 500 has risen to 13.3%, the highest level on record, while the influence of other big technology stocks has waned of late. That is according to Strategas Securities data going back to 1990.

Not since International Business Machines Corp. IBM -1.99%decrease; red down pointing triangle and AT&T in 1978 have two stocks made up a greater share of the benchmark, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

Todd Sohn, ETF strategist at Strategas, said Apple and Microsoft have emerged as havens in the stock market turmoil, bringing their weightings in the S&P 500 to 7.11% and 6.14%, respectively. The stocks have gained 21% and 14% in 2023 after suffering steep losses last year.

“It’s just been monumental,” Mr. Sohn said. “There’s just more comfort with the way Apple and Microsoft are viewed as opposed to going out and buying any tech name out there.”

But look at this: tech -- we mentioned this the other day --

More broadly, investors have piled into tech stocks to hide out from the banking crisis amid hopes that the Fed is nearing the end of its campaign raising interest rates. The tech-focused Nasdaq Composite has rallied 1.9% this month, extending its 12% gain for the year, while the S&P 500 is down 0.8% in March and has given up almost all of its early year advance.

Lori Van Dusen, founder and chief executive of LVW Advisors in Rochester, N.Y., cautions investors to actively pick stocks instead of just buying funds tied to an index, noting that the hefty weighting of tech companies during the dot-com bubble led to big market declines.

“The index is more concentrated than it’s been. You’re just making a bet that these are going to be the places to be going forward and that’s usually a bad bet,” she said. “That is not the way to make money in the coming years.”

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Again, all my posts are done quickly. There will be typographical and content errors in all my posts. If any of my posts are important to you, go to the source.