Since the close on June 8th, we’ve seen the tech-heavy Nasdaq sell-off from all-time highs by a few percentage points. But while it might seem like this pullback in Tech has dragged the rest of the market down with it, the average stock in the S&P 500 is actually up 70 basis points since June 8th. In reality, what we’ve seen since the 8th is a “mean reversion” trade. We can see this with our decile analysis of the S&P 500 below.
We’ve broken the S&P 500 into deciles (10 groups of 50 stocks each) based on year-to-date stock performance through the close on 6/8. Decile 1 contains the 50 best-performing stocks YTD through 6/8, decile 2 contains the next best 50, and so on and so forth until you get to decile 10, which contains the 50 worst performing stocks YTD through 6/8.
In the chart below, we highlight the average performance of the stocks in each decile since the close on 6/8. As shown, the 50 stocks that were up the most YTD through 6/8 are down an average of 3.5% since then, while the next best 50 through 6/8 are down an average of 0.30%. The stocks in the remaining 8 deciles have all averaged gains since 6/8, with decile 10 (the worst stocks YTD) seeing the biggest average gain at +2.37%.