Today’s Chart of the Day was shared in a note by Bespoke. The five largest stocks are responsible for a majority of the S&P 500's gains so far this year. As a result of this narrow leadership, the traditional cap-weighted S&P 500 is outperforming the equal-weight S&P 500 by more than 5% YTD. That's the second widest spread in the past 34 years. Conventional wisdom would say narrow leadership like this this is bearish. However Bespoke provides an interesting counter argument; "Besides 2020, the only other year where the gap was wider than two percentage points was in 1997. While it’s a small sample size and history doesn’t always repeat itself, we’d note that the S&P 500’s rest-of-year performance was a gain of over 20% in both of those years. Just saying."
