反常的经济，反常的市场

2020年10月

While still below January’s pre-pandemic level, the U.S. economy has made great progress since the lifting of lockdowns and restrictions. 然而, today’s economy is far from normal and, in many ways, is quite abnormal. The rapid closing and reopening of large swaths of the nation’s economy, combined with massive government support, has caused numerous distortions not seen in normal times. For example: 首页 sales are booming despite high unemployment. Government bond yields are at record lows despite a flood of newly issued debt. And many online and so-called essential retailers have seen their sales soar while others deemed nonessential have filed for bankruptcy.

 

Behind these and many other distortions is a certain logic; but they are distortions nonetheless. And their existence has created a large divide between the economy’s winners and losers. For investors, this divide has caused wide performance dispersion across the stock market.

 

A Look Below the Stock Market Headlines

的年代&P 500® Index rose to an all-time record high in August, giving the appearance that the U.S. stock market had fully recovered from its pandemic-triggered decline. 然而,, a deeper look at the stock market reveals that, 就像经济一样, the stock market is far from fully recovered.

 

如图1所示, many larger and faster growing companies, as reflected by the Russell 1000 Growth Index, 不仅恢复了, but have performed quite well this year, as some actually benefited from work-from-home and other pandemic-related changes. It is primarily that group of stocks that propelled the S&P 500®指数的收益.

 

Outside that group, gains have been harder to find. 事实上, 索引代表小, 中等规模的, higher-dividend-yielding, and value-leaning stocks were all trading lower on the year through 中期-September.

 

 

图表上也显示了S&P 500® Equal Weighted Index was lower on the year. The difference between this index and the more commonly followed S&P 500® Index is that the member stocks are each weighted equally instead of by market capitalization. Therefore, larger companies don’t have an outsized influence on the index’s returns. This year, larger companies have had a dominant influence on the S&P 500®指数的回报. As shown in Chart 2, the combined increase in market capitalization for the S&P 500® Index’s four largest member companies exceeds that of the index in total. 换句话说, the index’s remaining member stocks provided a combined loss this year through 中期-September.

 

 

Another example of the stock market’s wide performance dispersion can be seen in the broader S&P 1500®指数. As of 中期-September, the index had risen by 3.9%至今, but the median performing stock in the index had fallen by 13%, while a full two-thirds of the index’s 1,500 member stocks had declined in price.¹

 

期待

Investing in companies that benefited from or were less affected by the pandemic has proven to be a winning strategy this year versus owning a more broadly diversified stock portfolio. But will that continue to be the case?

 

The answer to that question depends on the answer to another question: Will every year be like this year? For many reasons, we certainly hope not, nor do we expect so. Therefore, our answer to both questions is “no.”

 

We see the economy continuing its rebound into next year, although at a slower pace than in recent months. In addition, we see the recovery broadening to include more industries. 因为这个, we anticipate that stock performance will broaden as well, rewarding investors with more diversified stock portfolios. Earnings growth will be the key to broadening the stock market’s performance. 展望2021年, projected earnings growth favors small and 中等规模的 companies over large companies with recession-depressed earnings expected to rebound by 83%, 48%, 分别为26%&P索引.²另外, 能源等价值行业, 工业, and financials are forecast to have higher 2021 earnings growth than growth sectors including technology and healthcare.³Should these earnings projections prove to be at least directionally correct, the dominant performance of this year’s leaders versus other groups will likely fade.

 

When this rotation will begin is impossible to predict. However, it may have already started. 自7月初以来, 小的性能, 中期, and value stock indexes has led the Russell 1000 Growth Index. ⁴Only time will tell whether that marks the beginning of a fuller recovery for both the economy and the stock market.
¹_{的年代&p1500®指数包括S&P 500®指数，S&p400中盘指数和S&p600小型股指数. Price performance is as of September 15, 2020.}

²_FactSet.

³_{FactSet, Earnings Insight—September 18, 2020}

⁴_{Price returns July 9, 2020 through September 18, 2020: Russell 1000 Growth Index +3.8%，罗素1000价值指数+7.7%, S&p400中型股指数+6.7%,年代&小型股指数p600 +8.8%.}