The "Forgotten 490"
The chart above from our friends at Strategas illustrates that the 10 largest stocks are up +15% YTD and have driven most of the recovery since August. The other 490 stocks (down -5% YTD) have been far less impressive. We haven't seen a market this narrow since the internet bubble.
According to Bloomberg, roughly 75% of core managers have underperformed the S&P 500 YTD. It's hard to beat a dealer that keeps turning up aces.
We think the "forgotten 490" start to participate as the negative impact on profits from dollar strength and lower oil prices recedes in the new year and the Fed normalizes policy.
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