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A Closer Look at the Stock Market: For those occasionally looking at the stock market, it may appear to be having a good year. However, looking a little closer at what’s really going on reveals that its gains are more concentrated than ever before. Just a handful of stocks are responsible for virtually all of the market’s gains so far in 2023. Highly concentrated markets aren’t unheard of (2020 = 10 large stocks responsible for a third of market gains). For 2023, through May 31, the Morningstar US Large-Mid Index—a collection of the 716 largest U.S. stocks, one that performs closely in line with the S&P 500—gained 9.6%. While that looks like solid returns, 9.3% came from the ten largest stocks. The overall market would be flat without supersized returns on the largest stocks.


Five of the largest stocks—Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon.com (AMZN), and Nvidia (NVDA)—accounted for 7.5% gain in the market (78% of the total gain). While this isn’t new, the numbers reached an unprecedented peak. The most recent previous high-water mark for a concentration of stock market returns came in 2020 when the five largest stocks at that time (Apple, Microsoft, Amazon, Meta, and Tesla) contributed 37% of returns. So far in 2023, the concentration of returns from the five largest stocks is double that figure.

With That Said: Looking deeper into the stock market can leave you with a “what now?” sort of moment. While we will continue to monitor the data, we also want to provide a reminder that market growth never works out in a straight line and, therefore, the ups and downs of this sort of concentration of success at the top will ebb and flow. Last week we learned job openings unexpectedly increased to 10.1 million in April. This is in sharp contrast to the March data of 9.6 million. One month, things look bleak in the job market, and just a few weeks later, it’s a bright spot. So, which is it? Ever since job openings peaked at 12.0 million in March of 2022, the metric has trended lower. One or two months of data isn’t going to change that.

The chart above shows longer-term trends in job openings are riddled with short-term ups and downs. For this reason, a deeper look into the stock market, or zooming out to look at overall trends, is so important. While the April report of 10.1 million job openings is down from the 2022 high, it remains well above pre-pandemic levels. Small hard-to-explain swings in data just reflect expected short-term noise in what are longer-term trends.

Business Briefing:

  • Bull Market: The S&P 500 rose 0.6% on Thursday, officially entering a bull market, defined as a 20% gain from its most recent low. The index hit that low, 3,577.03, on October 12, 2022, after fears that the Federal Reserve’s plan to aggressively raise interest rates to bring down the highest inflation in decades would wreck the economy. Since then, it has risen to 4,293.93, capped with its 0.6% rise on Thursday of last week. (The Associated Press)
  • Rattled Bond Market: Global bonds are struggling after two central banks unexpectedly raised interest rates in a sign more hikes could be coming to fight inflation. Shorter-maturity U.S. Treasury yields are approaching their highest levels since March; Australian equivalents have surged to their highest in more than a decade following the surprise rate hikes by the Bank of Canada and the Reserve Bank of Australia. The Treasury is prepping to issue nearly $1 trillion of Treasury bills now that Congress has suspended the debt ceiling, and that could overwhelm buyers and push short-term rates higher. (Bloomberg, The Wall Street Journal)
  • Crypto-Exchange Crackdown: The Securities and Exchange Commission (SEC) filed a lawsuit against Coinbase on Tuesday, a day after it sued the world’s biggest cryptocurrency exchange, Binance. The SEC says Coinbase, the biggest U.S. crypto exchange, failed to register as an exchange and submit to federal regulation. The actions against Coinbase and Binance stepped up efforts by the SEC to tighten industry oversight. (The Wall Street Journal)

Inspired to Always Watch Out for Others: It’s been one of the busiest and deadliest seasons for summiting Mt. Everest (also known as The Mountain So High No Bird Can Fly Over It). Thirty-year-old Sherpa, Gelje recently made a heroic effort though. Gelje and a colleague were guiding a Chinese client to the nearly 30,000-foot summit when they spotted a Malaysian climber on the cusp of freezing to death. Although just around 5 miles from the summit, they found the climber around the Balcony Area clinging to a rope. This area is considered Everett’s “death zone,” where the lack of oxygen and -22 degrees Fahrenheit temperatures prohibit extended human visitation. At that moment, Gelje decided to wrap the man in a heated blanket, strapping him to his back and carrying him down the descent, which took 6 hours before he found another sherpa. They managed to get the climber to an area accessible by helicopter to save his life. Watch the rescue report here, and may we all be inspired to watch out for others in some practical way this week. Perhaps we need to be on the lookout as it may not be as obvious a moment as Gelje had on the way up Everest.