Even without any interest rate cuts so far in 2024 – and with the likelihood of just one meagre rate reduction by the end of the year – the stock market has been purring along.Even without any interest rate cuts so far in 2024 – and with the likelihood of just one meagre rate reduction by the end of the year – the stock market has been purring along.
Other giant companies with a convincing AI flavour, such as Meta and Alphabet , along with chip and hardware companies like Super Micro Computer and Micron Technology, have turned in superlative performances lately, too. The standard cap-weighted S&P 500 has risen almost 14 per cent in 2024 – a spectacular gain in less than six months. But there is an equal-weighted version of the S&P 500, too, in which 10 per cent gains – for giants like Microsoft and merely large companies like News Corp – have the same effect. The equal-weighted S&P 500 has gained only about 4 per cent in 2024. Similarly, the Dow Jones Industrial Average, which isn’t cap-weighted , is up less than 3 per cent.
Even among technology stocks, the bull market isn’t treating all companies equally. Ned Davis Research, another financial market research firm, said in a recent report that while companies that design, manufacture or make equipment for chips in the S&P 500 are performing splendidly, all other technology sectors have lagged the index in 2024.While I pay close attention to these developments, I try not to care about them as an investor.