The S&P 500 is up 10% year-to-date, powered by the 'Magnificent Seven' tech giants whose foreign-heavy revenues are being boosted by the weaker dollar. Concentration in the top 10 stocks is at its highest since the 1960s, with earnings strength - 83% of companies beating estimates - driving sentiment.
The S&P 500 experienced a pullback of 0.49% amid growing uncertainties surrounding the U.S. economy and global conditions, driven by weak economic data and geopolitical risks.
The top 10 stocks contribute 54% of market returns since January 2021, with the Magnificent Seven driving significant risk exposure for investors.
Despite the ongoing uncertainties in the market, including geopolitical tensions and tariffs, U.S. equities are bouncing back, showing signs of resilience under current conditions.
Within the S&P 500, our High Sharpe Ratio basket contains companies with the highest prospective risk-adjusted returns relative to their sector peers. The basket's median constituent has a prospective risk-adjusted return of 0.9.