Share Market Performance in 2024:
Share Market refers to buying some percentage of ownership of any company.
The share market is also called the Stock market and Equity market.
The United States of America’s stock market is the biggest with a 55.9% market share of total world equity. It has always been an investor for many other companies outside the USA.
Now let’s discuss the performance of the USA in 2023 as compared to the past few years:
The economic outlook for 2023 remains uncertain, there are reasons for investors to be optimistic in June and beyond.
The USA has mainly 3 indices of the stock exchanges that are
1. Dow Jones Industrial Average
2. S&P 500
3. Nasdaq Composite
These show the trend of stock increase and decrement the US stock market
The year 2020 was marked by significant volatility in the US stock market due to the global COVID-19 pandemic and its economic impact. Here’s a brief overview of the major indices’ performance in the USA during that year:
1. S&P 500: The S&P 500 is a broad-based index representing the performance of 500 large-cap US companies. In 2020, the S&P 500 experienced a significant downturn in March due to the pandemic but recovered later in the year. The index ended the year with a positive return of about 16.26%.
2. Dow Jones Industrial Average (DJIA): It is a price-weighted index consisting of 30 large US companies. It followed a similar trajectory as the S&P 500, experiencing a sharp decline in March and recovering gradually. The DJIA posted a return of approximately -4.63% for the year 2020.
3. Nasdaq Composite: The Nasdaq Composite is a tech-heavy index that includes numerous technology and growth-oriented companies. It outperformed other indices in 2020, driven by the strong performance of technology stocks during the pandemic. The Nasdaq Composite recorded an impressive return of around 43.64% for the year.
In the year 2020, there was a dropdown in the Dow Jones Industrial Average and an increment in the other two indices of the stock market
Next, the US stock market experienced a generally positive performance in 2021, despite some periods of volatility. Here are some key highlights:
1. S&P 500: The S&P 500, which is a broad measure of the US stock market, had a strong year in 2021. It opened the year at around 3,756 points and closed the year at approximately 4,671 points, representing a gain of about 24% for the year.
2. Dow Jones Industrial Average (DJIA): The DJIA, consisting of 30 large publicly traded companies, also had a positive performance in 2021. It started the year at approximately 30,606 points and ended the year at around 35,804 points, marking a gain of around 17% for the year.
3. Nasdaq Composite: The Nasdaq Composite, which is heavily weighted towards technology stocks, had a strong performance in 2021. It began the year at approximately 12,888 points and concluded the year at around 15,838 points, showing a gain of about 23%.
4. COVID-19 Impact: In 2021, the stock market continued to recover from the initial impact of the COVID-19 pandemic, as vaccines were rolled out and economic activities resumed. However, there were still occasional periods of volatility influenced by concerns about rising inflation, interest rates, and global economic conditions.
Compared to these two years 2023 brought a drastic change
The stock market heads into the second half with nearly 15% total return so far in 2023
The Technology Select Sector Index seeks to provide an effective representation of the S&P 500 Index. It measured the performance of a large segment of the U.S. equities market, which covered approximately 75% of the U.S. market, including 500 leading companies in the U.S. economy.
.The S&P 500 Monthly Return is the investment return received each month when holding the S&P 500 index. The S&P 500 index is a collection of 500 large US stocks, weighted by market cap, and is the most widely followed index representing the US stock market.
The S&P 500 stayed in its two-month trading range and then broke above it at month’s end U.S. growth was forecasted at 1%, in 2023., but, from May there was a gain of 0.25% which was a win situation.
The S&P 500 was up 9% on the year as the 100th trading day of 2023. Since 1950, when the S&P 500 has been up at least 8% on the 100th trading day of a calendar year, the index has averaged a 10additional gain for the remainder of the year. More than 95% of S&P 500 companies have now reported first-quarter earnings which were the reasons for investors to be optimistic in June and beyond.
However, investors concerned about the potential for a U.S. recession can also take a more defensive approach to the market and increase their financial flexibility in 2023 by dialing back exposure to stocks and increasing their cash holdings. Investors can already earn 4% or higher in online savings accounts heading into June, and those interest rates will likely remain elevated for at least the next several months.
Since, the S&P 500 has climbed about 9.2% this year, but due to sudden changes and major downfalls just five stocks are powering most of that gain in an even more extreme rendition of the Pareto distribution.
The five biggest names by market capitalization include Apple, Nvidia, Alphabet, Microsoft, and Amazon.
Together, they have outperformed the index by 30 percentage points this year, and now that May’s over, have beaten it for five consecutive months. This year’s rally is being propped up by Nvidia (+167%), Apple (+43%), Alphabet (+38%), Microsoft (+37%), and Amazon (+39%).
Value stocks have historically outperformed growth stocks when interest rates are high, and growth stocks lagged value stocks by a wide margin in 2022. However, that trend has reversed so far in 2023 as investors anticipate an end to rate hikes and even a potential Fed pivot to rate cuts by the end of the year.