To The Moon

As we enter the third month of 2023, it's a perfect time to examine the current state of the market.

In this evaluation, we'll utilize the S&P 500 index, a well-diversified collection of blue-chip stocks, as a benchmark for assessing the US stock market.

Despite experiencing a correction over the last two weeks, the S&P 500 remains up by 2.9% from the beginning of the year until 1 March.

When it comes to sector performance, Communication Services (XLC) and Consumer Discretionary (XLY) have outperformed the rest with a remarkable return of more than 10% in the past two months.

On the other hand, Utilities (XLU) has been the weakest performer, declining by 9% over the same period.

Here are the list of SPDR Sector performances (from the best to worst):

Communication Services (XLC) +12%

Consumer Discretionary (XLY) +11%

Technology (XLK) +9%

Materials (XLB) +6%

Financials (XLF) +4%

Real Estate (XLRE) +3%

Industrials (XLI) +3%

Energy (XLE) -2%

Consumer Staples (XLP) -4%

Health Care (XLV) -7%

Utilities (XLU) -9%

In 2023, there has been a significant shift in market trends, where sectors such as Energy, Consumer Staples, Health Care, and Utilities experienced a decline, while tech stocks represented by XLC and XLY have surged.

The optimism has been fueled by the expectation that the rate hikes in 2023 will be more moderate.

Among the S&P 500 stocks, Tesla (TSLA) emerged as the best performer, with a remarkable surge of 65% from the start of 2023.

Nvidia (NVDA) and Meta Platforms (META) were two other favorite stocks among investors and were up 55% and 44% respectively over the same period.

Below is a list of top 10 performing S&P 500 component stocks:

1) Tesla (TSLA) +65%

2) Discovery (WBD) +58%

3) Nvidia (NVDA) +55%

4) Catalent (CTLT) +53%

5) Align Tech (ALGN) +46%

6) Royal Carribean (RCL) +45%

7) Meta Platforms (META) +44%

8) United Airlines (UAL) +39%

9) Monolithic Power Sys (MPWR) +38%

10) Wynn Resorts (WUNN) +36%

Moving on to the worst-performing S&P 500 stocks, Moderna (MRNA) was the second-worst performer, down 24% year-to-date. Pfizer (PFE) was down by 22% too. It appears that the pandemic fortune for these biotech companies has come to an end.

Below is a list of 10 worst performing S&P 500 component stocks:

1) Lumen Technologies (LUMN) -38%

2) Moderna (MRNA) -24%

3) Baxter (BAX) -23%

4) Pfizer (PFE) -22%

5) Dish Network (DISH) -20%

6) Enphase Energy (ENPH) -20%

7) Molina Healthcare (MOH) -17%

8) Centene (CNC) -16%

9) Nextera Energy (NEE) -16%

10) Northrop Grumman (NOC) -15%

So far this year, the number of gainers and losers in the S&P 500 index has been almost equal, with 297 gainers and 206 losers year-to-date.

The average gain for the gainers was 11%, while the average loss for the losers was 7%.

Recently, there have been renewed concerns regarding more rate hikes than previously expected, leading to a correction in the markets over the past two weeks.

According to current predictions, the peak fed fund rate could be in the range of 5.25% to 5.5%, which is higher than the earlier estimate of 5% to 5.25%.

As a result, the market is recalibrating to this new expectation. Currently, the S&P 500 index is still hovering above the 200-day moving average, and it is an important level to watch - as long as it stays above this point, there is still a chance for the bull to resume.