Bob Graham – Riggs Asset Management Company

Hi, I’m Bob Graham.

Today I want to have a quick discussion about the difference between last year’s market in 2023 and what we’re seeing so far this year.

One of the biggest changes is that last year’s market was largely driven by the seven largest companies in the S&P 500.

These included companies such as:

• Apple

• Amazon

• Meta

• Microsoft

• Nvidia

• Tesla

• Alphabet (Google)

All of these companies performed extraordinarily well in 2023, and they were responsible for a large portion of the overall market’s gains.

This year, however, we’re beginning to see a shift in market leadership.

Many of those large companies are still performing very well, but the primary driver of the market now appears to be a broadening of participation across many more companies and industries.

For example, we’re seeing smaller companies — particularly in the industrial sector — begin to emerge as strong performers.

As the infrastructure bill moves from the planning phase into actual construction and implementation, companies involved in infrastructure and industrial development are beginning to benefit.

We’re also seeing improvements in healthcare, particularly in areas such as:

• Biotechnology

• Medical technology

• Companies that produce surgical equipment and related healthcare products

Some larger companies in healthcare, such as certain insurance providers, have faced challenges. But many smaller healthcare companies are beginning to perform very well.

We’re also seeing this trend within the technology sector.

Beyond the largest technology companies, many smaller technology firms that are positioned to benefit from artificial intelligence are beginning to emerge as important drivers of the market.

So the key takeaway is this:

It’s not that the largest companies are suddenly performing poorly — in many cases they are still performing extremely well.

But what we’re seeing now is a broadening of the market, where gains are being driven by many more companies across multiple industries.

This kind of market environment is typically very healthy.

If this trend continues, it could be very positive for the remainder of 2024, because a market driven by a wide range of companies tends to be more stable and sustainable than one driven by only a handful of large stocks.

There has been a lot of discussion recently about potential changes in the leadership of the largest mega-cap technology companies.

But in reality, what’s really happening is that thousands of other companies across the market are beginning to improve and contribute to overall market growth.

And if that continues, it could lead to a strong and broadly supported market for investors throughout the year.