As investors prepare to close the book on 2023, most are likely feeling festive, given banner returns from the
S&P 500
and
Nasdaq Composite.
Yet the gap between this year’s winners and the average stock is a stark reminder of how few companies commanded the lion’s share of the gains.
Much ink has been spilled over the huge gains seen by the Magnificent Seven big tech stocks—
Alphabet,
Amazon,
Apple,
Meta Platforms,
Microsoft,
Nvidia,
and
Tesla.
Also, 13 components of the S&P 500 have logged triple-digit-percentage gains year to date, more than half of which are tech-related names, according to Dow Jones market data. Overall, 25 stocks in the index have enjoyed year-to-date rises in excess of 75%.
However the average stock barely clawed its way to a double-digit rise.
Most members of the S&P 500 had much more modest gains. Screening stocks in the index by their 2023 performance shows that
Home Depot
was smack dab in the middle, Stock No. 250, with a year-to-date gain of 10.34%.
That was better than some may have feared for Home Depot, given how higher mortgage rates and slim supply have crimped new-home sales, which are one of the biggest business catalysts for the company and peer
Lowe’s.
In addition, Home Depot was dealing with weaker demand: Not only did many people already complete their home-improvement projects during their time at home during the pandemic, but consumers in general were more cautious with their budgets and big-ticket spending as inflation weighed on bank accounts.
Given these headwinds, Home Depot stock—which surged during the pandemic boom—were always going to have an uphill battle, so turning in a middling performance isn’t surprising. Lowe’s stock came in at No. 238, with an 11.87% increase.
Unlike the tech names that dominated this year’s winner’s circle—and pushed the Nasdaq up 44.26%, as of Wednesday’s fresh 52-week high—there wasn’t much of a theme to the middle of the pack performers, although all participated, to one degree or another, in November’s rally.
Coming in just ahead of Home Depot stock were shares of chemical giant Dow, which notched a 10.56% gain, and shares of industrial conglomerate
Teledyne Technologies,
with a 10.46% rise.
Just behind Home Depot stock were shares of utility
PG&E,
with a 10.21% gain, and
Morgan Stanley
stock, up 10.16%.
Of course, there are worse fates than ending the year with gains of roughly 10%, particularly as some of the index’s worst performers lost almost half their value in 2023.
Still, the five mediocre stocks of the year show how easily investors could have missed out on 2023’s big returns if they weren’t riding with Big Tech.
Write to Teresa Rivas at [email protected]
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