Over the last several weeks, we’ve been highlighting a number of inflationary statistics in various economic indicators.  One place, though, where consumers tend to quickly notice price increases where we haven’t seen a major uptick yet is in gas prices.  The national average price of a gallon of gasoline in the United States currently stands at $2.53 per gallon, which is actually lower than the average price for this time of year going back to 2005.  Additionally, so far this year the national average price has increased by just 1.2%.  While that reverses a two-year trend where prices declined to kick off the year since 2005, gas prices have historically risen early in the year with the average YTD change through 3/6 being right around 7%. At least consumers have that going for them!  That said, we aren’t completely out of the woods yet.  On a historical basis, gas prices typically rise through the end of May before leveling off and falling from Labor Day through year-end.

So far this year, the S&P 500 is up 2%, while the average stock in the Russell 3,000 (an index that contains large-cap, mid-cap, and small-cap stocks) is up 0.9%.  These performance numbers highlight how the largest stocks in the market have boosted the performance of major indices.

There are some big discrepancies when you look at cap-weighted S&P 500 sector performance versus the performance of the average stock in each Russell 3,000 sector.  One of the biggest standouts is the Consumer Discretionary sector.  As shown in the chart below, the S&P 500 Consumer Discretionary sector is up 6.3% year-to-date.  That’s the second-best performing sector in the market.  In the Russell 3,000 Consumer Discretionary sector, though, the average stock is actually down 0.1% year-to-date.  The significant underperformance on an equal-weight basis suggests that Consumer Discretionary is much weaker than it appears underneath the surface.  The two main stocks causing this discrepancy are Netflix (NFLX) and Amazon (AMZN).  Given their massive market caps, their movements have a huge impact on the S&P 500 Consumer Discretionary sector.  With NFLX up 69% YTD and AMZN up 31%, these two stocks account for nearly all of the cap-weighted sector’s YTD gains.

The opposite trend is in place for the Health Care sector.  Here we’ve seen the largest Health Care stocks lag the smaller ones year-to-date.  The S&P 500 Health Care sector is up 1.8% in 2018, while the average Health Care stock in the Russell 3,000 is up 7.4%.  This suggests that the Health Care sector has actually been performing better than it appears.  The same is true for Consumer Staples based on the data points in the chart.

For Technology, we’ve seen strength across all market cap levels.  The S&P 500 Technology sector (cap-weighted) is up 7.9% year-to-date — the best of any sector.  The average Technology stock in the Russell 3,000 is also up 7.9% — the best of any sector.  You won’t find any weakness underneath the surface for Tech at this point.

Below is a list of the best performing Russell 3,000 stocks year-to-date.  As mentioned above, Health Care looks stronger underneath the surface due to big gains on an equal-weight basis.  You can see what we mean by looking at the list of best performers.  They’re nearly all biotech names!  Of the 30 best performing Russell 3,000 stocks year-to-date, 21 are Health Care sector stocks.

Four Russell 3,000 stocks are up more than 100% in 2018 already, and they’re all biotech names — CASC, ATRA, IOVA, and FATE.  The top performing non-Health Care stocks are Fossil Group (FOSL), Virtu Financial (VIRT), and Eastmak Kodak (KODK).  We doubt many investors would have guessed FOSL and KODK to be top performers at the start of the year.

Below is a list of the top performing S&P 500 stocks year-to-date.  Netflix (NFLX) is up the most at +69%, followed by XL Group (XL), CSRA, Hewlett Packard Enterprise (HPE), and Amazon.com (AMZN).  Other notable winners include NVIDIA (NVDA), Kohl’s (KSS), Under Armour (UAA), salesforce.com (CRM), Adobe (ADBE), and Macy’s (M).

We’ve been highlighting the chart of Bitcoin below over the past month or so because of how much the crypto seems to be trading on technicals.  After finding support around the $7,000 level in early February, Bitcoin bounced significantly and broke two key downtrend lines in the process.  The reason we’re pointing out the chart today is because the rally has been stopped in its tracks right at the 50-day moving average.  Bitcoin bulls were hoping that price could take out both the 50-day and the high from February 20th, which was just under the $12,000 mark.  Instead, the 50-day (which sits right below $12,000) acted as stiff resistance and we’ve seen price pull back to the $11,000 mark.

In an earlier post looking at breadth among the different industry groups in the S&P 500, we noted that Retailing was the top performing group in the S&P 500 YTD with a gain of over 15%.  Looking at the table below, however, you would have hardly guessed by looking at the performance of brick and mortar retailers in the S&P 500 on a YTD basis.  Of the 25 individual brick and mortar companies listed, just nine are up YTD, and the average YTD performance of these stocks has been a decline of 0.77%.  To be sure, there have been some winners with stocks like Kohl’s (KSS) and Macy’s (M) up over 20% and a total of five stocks up more than 10%.  At the other end of the list, though, there are also five stocks down by double-digit percentages.

The table below shows the YTD returns of all the stocks in the S&P 500 Retailing Industry Group.  That includes all the names highlighted above plus the four non-traditional brick and mortar retailers in the group (highlighted in green).  As shown, all four of the stocks not listed in the table above have seen stellar returns so far in 2018, with Netflix’s (NFLX) 67% gain leading the way higher.  Right behind NFLX, Amazon (AMZN) has rallied over 30%, while Booking (BKNG) and Trip Advisor (TRIP) round out the top five.  In this table, we have also included a column showing what each company’s market cap equals as a percentage of the industry group’s total market cap.  By itself, AMZN accounts for almost 45% of the industry group, while NFLX accounts for another 8.4%.  BKNG is no slouch either at 6.1% of the industry group’s total market cap. What’s really amazing about these four stocks is that together they account for just under 60% of the industry group’s total market cap, yet when you think retail, for most people they aren’t the first companies that typically come to mind.