The Russell 3,000 contains US stocks from large-caps to small-caps that account for more than 98% of the market cap of publicly traded US stocks.  Below we show the average YTD total return of Russell 3,000 stocks in each sector through the close on December 10th.  While the cap-weighted Energy sector of the S&P 500 is up slightly year-to-date, the average US Energy stock across market caps is actually down 10% so far in 2019.  On the flip side, the average Technology stock is up 34.5% on the year, which is more than 11 percentage points higher than the average for all stocks in the Russell 3,000.  Other sectors that have seen their components outperform the average include Health Care, Real Estate, and Industrials.

Below is a look at the 40 best-performing stocks in the Russell 3,000 so far this year.  The top-performing stock is Axsome Therapeutics (AXSM), which has developed a promising narcolepsy drug.  AXSM is currently up 1,628.7% in 2019 — more than double the next best performer.

You’ll notice that the large majority of names on the list are biotech companies in the Health Care sector.  When biotech is working, this is usually the case.  The potential upside for drugs and treatments that ultimately work is enormous, and during up-trending markets when investors are willing to take on risk, small-cap biotechs absolutely fly.

To clean up the list a little, below we show the best performing non-Health Care stocks in the Russell 3,000 year-to-date.  EverQuote (EVER) ranks first with a gain of 761.5%, followed by Cardlytics (CDLX), Enphase Energy (ENPH), and Roku (ROKU).

You’ve likely not heard of most of the names on these two lists, but we’d recommend sitting down and researching them just to get a better sense of what’s REALLY been working lately.  Sign up using our 2020 Annual Outlook Special to become a Bespoke Premium member today.

In the past year and a half, we have periodically (see here, here, and here) kept tabs on the size of the US’s auto manufacturers: Ford (F), General Motors (GM), and Tesla (TSLA).  While on the road you are perhaps more likely to come across a car, truck, or SUV created by Ford or GM, the rookie of the industry, TSLA, actually boasts the largest market cap at the current moment with the company valued at $63.97 billion. That has not been the case all year though. The stock’s downtrend in the first half of 2019 resulted in TSLA spending a brief stint as the automaker with the smallest market cap; falling below that of Ford (F). After bottoming out in June, the stock began to grind higher, breaking out of its downtrend, and ultimately surging over 17.67% the day after earnings in October.  It was at this point that TSLA took the crown from GM which currently has a market cap of $50.38 bn. Since then even smashed windows at the Cybertruck reveal only temporarily dampened TSLA as the stock has continued to push higher in the past couple of weeks. Given that, TSLA has further distanced itself from GM and F in terms of market cap with the differences between the companies’ sizes some of the largest on record. In fact, only December of last year saw TSLA’s market cap larger than that of Ford or GM by a wider margin as shown in the second and third charts below.  Start a two-week free trial to Bespoke Institutional to access our 2020 Outlook Report, interactive tools, and much more.

In the past couple of days, we’ve released a few more sections of our 2020 Outlook Report including those on Washington, Commodities, and Housing. In addition to gauging the overall health of the economy and potential for future economic growth, in the Housing section, we also discussed home price trends using the gold standard for housing prices: the Case-Shiller Home price indices.  Below is a complimentary excerpt from the Housing section of our 2020 Outlook Report.  To view the entire section and gain access to all of the other sections (plus the rest of our research offering), join Bespoke Premium with this 2020 special offer.

The Case-Shiller indices saw home price growth slow sharply in 2018 from the 6% to 7% YoY range all the way down to the 2% range, but in 2019 home price appreciation began to pick back up.  One significant cause of the fluctuations in home prices over the past couple of years has been the implications of tax policy. 

Prior to the passage of the Tax Cuts & Jobs Act (TCJA) at the end of 2017, relatively high and low tax metro areas had no consistent home price trends relative to each other.  The Trump tax bill capped SALT (state and local taxes) deductions, however, which hurts higher-tax metro areas like DC, LA, New York, and Chicago more than lower-tax metro areas like Denver, Las Vegas, Charlotte, and Dallas. This has resulted in home prices rising more in low-tax jurisdictions versus high-tax jurisdictions in each month since early 2018 as shown in the chart below. This trend is not likely to last forever, especially as the effects have already waned in 2019 compared to 2018, but the TCJA has certainly been a big penalty for homeowners in high tax metros, and the data proves that out. 

We’ve been discussing the very recent underperformance of the semiconductors for a few weeks now ever since the group’s relative strength versus the S&P 500 peaked back in early November.  In the last week, the Philadelphia Semiconductor Index (SOX) has made a nice recovery off of its early December low, and in that rally, it also broke its intraday downtrend that had been in place since the SOX’s 11/15 intraday high.  In yesterday’s trading, the group made a higher high but then faded in the afternoon finishing both near its intraday lows as well as right above the downtrend line that was previously broken last week.  Over the coming days, this 1,710 – 1,715 level will be a key one to watch to see if key support can hold.  Sign up using our 2020 Annual Outlook Special to gain access to our full report between now and year-end which covers the market from just about every angle imaginable!