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One-quarter of the stock market’s 2019 gains come from just five stocks

Scott Gamm

Roughly one-quarter of the S&P 500’s (^GSPC) 15% gain so far this year comes from five high-profile stocks: Microsoft (MSFT), Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL) and Facebook (FB).

That’s the assessment from Nick Colas, co-founder of DataTrek Research, who ran the numbers:

  • Microsoft: 1.3 points

  • Apple: 0.8 points

  • Amazon: 0.8 points

  • Alphabet: 0.1 points

  • Facebook: 0.8 points

That results in a grand total of 3.8 points of the S&P 500’s 15.3% gain year-to-date. Without these five stocks, the S&P 500 would be up 11.5%.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., June 17, 2019. REUTERS/Brendan McDermid

“S&P 500 returns over the next 3-5 years are inextricably linked to the performance of the Tech sector and especially those 5 names,” wrote Nick Colas, co-founder of DataTrek Research in a note to clients on Tuesday.

For context, Microsoft and Apple are in the Technology Sector, while Amazon is in the Consumer Discretionary Sector. Facebook and Alphabet are in the newly created Communication Services sector.

Uber and Lyft

Colas also thinks it may be a long time until newer, but high-profile stocks like Uber (UBER) and Lyft (LYFT) are able to contribute to index gains.

“Names like Uber, Lyft and WeWork will be unable to boost index returns until they turn profitable and become eligible for inclusion in the S&P 500,” he wrote.

The Power of Microsoft

While the aforementioned five stocks are powerful for the broader market, one in particular has been taking on extra importance in recent weeks: Microsoft.

Here’s how:

The S&P 500 is off just about 1.3% since its May 1 intraday record high, which is also the day that Apple shares reached a 2019 high. Yet, Apple shares are down a much steeper 9.3% since then.

How has the market been able to move back near record highs even with Apple flirting with correction territory? Microsoft.

The stock has hit multiple record highs recently and has a market cap of over $1 trillion. It’s up over 6% since May 1.

Scott Gamm is a reporter at Yahoo Finance. Follow him on Twitter @ScottGamm.

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