The share of the two largest stocks in the S&P 500 index became the largest since 1978
The combined share of Apple and Microsoft currently accounts for 13.3% in the calculation of the S&P 500. The iPhone maker has 7.11%, and the software and cloud computing maker has 6.14%
Read full version
The combined share of Apple and Microsoft shares in the US broad market S&P 500 stock index has become the largest in the last 45 years. The combined share of Apple and Microsoft currently accounts for 13.3% of the S&P 500 index, with the iPhone maker holding 7.11% and the software and cloud computing maker 6.14%, according to data from brokerage Strategas Securities.
The market capitalization of both companies exceeds $2 trillion, according to NASDAQ trading data as of March 23.
The last time IBM and AT&T had the largest combined weight in the index was in 1978, writes The Wall Street Journal, citing S&P Dow Jones Indices senior analyst Howard Silverblatt.
AAPL — Wedbush [07.03.2024] [0.20]
Against the background of the crisis in the American financial system, stocks of large technology companies have become a new haven for retail investors in the market. This led to the growth of the papers of IT giants: since the beginning of 2023, Apple’s papers have grown by more than 21%, Microsoft’s shares – by 13.5%.
Another supportive factor for tech stocks is the sharp decline bond yields, as well as a slowdown in the tightening of the monetary policy of the US Federal Reserve after the bankruptcy of Silicon Valley Bank and Signature Bank.
On Wednesday, March 22, following a two-day meeting on March 21-22, the US Federal Reserve raised the rate by 25 bp – from 4.5-4.75% to 4.75-5% per annum. At the end of the meeting, the regulator signaled that the cycle of rate hikes is not over yet, despite the risk of a deepening banking crisis that has rocked global markets.
“While this will sound like a comment from the Twilight Zone to many investors, tech stocks have become the new defensive stance, with big tech companies the main beneficiary of the current momentum.” quotes Business Insider Wedbush analyst Dan Ives.
The Twilight Zone is an American anthology series featuring sci-fi, scary and mysterious stories. Probably, the analyst meant that considering technological stocks in the current situation as a defensive asset is from the category of fantasy.
Dmitry Ilyin.
