July 2024, In the Spotlight -
Concentration and dispersion in the market is actually, you know, pretty intense.
You look at the performance in the first quarter: About 70% of the performance of the growth benchmark was down to four stocks. In terms of dispersion, within the Mag 7[1], there's some really high-flyers: the top performer, NVIDIA, up over 80%; Tesla down over 30[2].
So, seeing that differentiation come through in Mag 7 is also very healthy.
I think that, coupled with earnings expectations in the S&P broadening out to other areas of the market, gives us a fair chance that we should see some broadening out as you look forward from here.
To put it into perspective, 2023 was a huge year in U.S. growth, and it's getting more difficult to find idiosyncratic ideas that you can really have conviction in.
Having said that, we're finding really interesting ideas in fintech, particularly those payment companies where you see this move from cash into online.
In health care, we really like orthopaedics, robotic surgery, your GLP-1s.
So, we find that area very interesting.
And then finally, even in energy, we're finding an increased investment in offshore drilling, which we think will bode really, really well for those companies that service that industry.
[1] The “Magnificent 7” are Apple, Alphabet, Amazon.com, Meta, Microsoft, NVIDIA, and Tesla. The specific securities identified and described are for informational purposes only and do not represent recommendations. Past performance is not a reliable indicator of future performance.
[2] First quarter performance quoted is year-to-date, as of April 16, 2024. Source: Refinitiv Eikon, analysis by T. Rowe Price.
Julian Cook
Portfolio Specialist
Julian Cook is a portfolio specialist in the Equity Division. He is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd.
Portfolio Manager Gabe Solomon discusses his outlook for U.S. large-cap value equities.
Important Information
This material is being furnished for general informational and/or marketing purposes only. The material does not constitute or undertake to give advice of any nature, including fiduciary investment advice, nor is it intended to serve as the primary basis for an investment decision. Prospective investors are recommended to seek independent legal, financial and tax advice before making any investment decision. T. Rowe Price group of companies including T. Rowe Price Associates, Inc. and/or its affiliates receive revenue from T. Rowe Price investment products and services. Past performance is not a reliable indicator of future performance. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested.
The material does not constitute a distribution, an offer, an invitation, a personal or general recommendation or solicitation to sell or buy any securities in any jurisdiction or to conduct any particular investment activity. The material has not been reviewed by any regulatory authority in any jurisdiction.
Information and opinions presented have been obtained or derived from sources believed to be reliable and current; however, we cannot guarantee the sources’ accuracy or completeness. There is no guarantee that any forecasts made will come to pass. The views contained herein are as of the date written and are subject to change without notice; these views may differ from those of other T. Rowe Price group companies and/or associates. Under no circumstances should the material, in whole or in part, be copied or redistributed without consent from T. Rowe Price.
The material is not intended for use by persons in jurisdictions which prohibit or restrict the distribution of the material and in certain countries the material is provided upon specific request. It is not intended for distribution to retail investors in any jurisdiction.
Australia—Issued by T. Rowe Price Australia Limited (ABN: 13 620 668 895 and AFSL: 503741), Level 28, Governor Phillip Tower, 1 Farrer Place, Sydney NSW 2000, Australia. For Wholesale Clients only.
Canada—Issued in Canada by T. Rowe Price (Canada), Inc. T. Rowe Price (Canada), Inc.’s investment management services are only available to Accredited Investors as defined under National Instrument 45-106. T. Rowe Price (Canada), Inc. enters into written delegation agreements with affiliates to provide investment management services.
EEA—Unless indicated otherwise this material is issued and approved by T. Rowe Price (Luxembourg) Management S.à r.l. 35 Boulevard du Prince Henri L-1724 Luxembourg which is authorised and regulated by the Luxembourg Commission de Surveillance du Secteur Financier. For Professional Clients only.
New Zealand—Issued by T. Rowe Price Australia Limited (ABN: 13 620 668 895 and AFSL: 503741), Level 28, Governor Phillip Tower, 1 Farrer Place, Sydney NSW 2000, Australia. No Interests are offered to the public. Accordingly, the Interests may not, directly or indirectly, be offered, sold or delivered in New Zealand, nor may any offering document or advertisement in relation to any offer of the Interests be distributed in New Zealand, other than in circumstances where there is no contravention of the Financial Markets Conduct Act 2013.
Switzerland—Issued in Switzerland by T. Rowe Price (Switzerland) GmbH, Talstrasse 65, 6th Floor, 8001 Zurich, Switzerland. For Qualified Investors only.
UK—This material is issued and approved by T. Rowe Price International Ltd, Warwick Court, 5 Paternoster Square, London EC4M 7DX which is authorised and regulated by the UK Financial Conduct Authority. For Professional Clients only.
© 2024 T. Rowe Price. All Rights Reserved. T. ROWE PRICE, INVEST WITH CONFIDENCE, and the Bighorn Sheep design are, collectively and/or apart, trademarks of T. Rowe Price Group, Inc.