Records for the Giants, Quiet Gains for the Average Stock

By Gavin Magor Reviewed by: Leo Tavolaro

If you own an S&P 500 fund, Wednesday felt like a fine day to be in the market.

The index climbed, tech led and Apple set a record.

But a record for the giants is not a record for your typical stock.

Our own equal-weighted data shows where the steadier money has been made, and one record-setting name sits on both sides of the divide.

Two stocks to buy, and one fund to simply hold.

Wednesday's Rally Wore a Tech Jersey

The S&P 500 rose 1.3% on Wednesday, Nov. 11.

Technology led the way, up 2.7%.

Consumer discretionary was the only sector to finish lower.

And Apple (AAPL) closed at a record $355.63.

New Lows for the Rest

But the bounce was thin.

Trading volume ran about a fifth below its 20-day average.

Part of that was the calendar, since the Treasury cash market was closed for Veterans Day.

Beneath the Nasdaq's gain, more of its stocks set new 52-week lows than new highs.

So your cap-weighted fund caught the rally, but most of the lift came from the biggest companies in it.

That cuts both ways when one of those giants stumbles.

Nvidia (NVDA) traded at $165.04 at midday Thursday, after its chief executive resigned.

That left it down 5% on the day.

Yet the Dow and the S&P 500 had turned higher by then.

The rest of the market absorbed the shock, which is the equal-weight lesson in real time.

The Six-Week Chart Most Index Investors Never See

Our new Weiss Sector Pulse, produced by my colleague Sean Levine, Associate Director of Research, weighs every stock equally.

So a mid-size retailer counts as much as a trillion-dollar chipmaker.

Over the six weeks to Nov. 6, the S&P 500 lost 4.9% weighted by market value.

Weighted equally, the average member gained 2.4%.

That's a gap of more than seven points between the index and its typical stock.

Close to two-thirds of the index's members finished higher.

Tech did the damage.

The average tech stock in the index lost 13.5%.

That was the sector's weakest reading in our dataset.

Chip, memory and AI-hardware names fell hardest.

Consumer discretionary led the other way, with a 9.8% gain.

Consumer staples was right behind at 9.7%.

Utilities and health care each gained more than 9%.

So the average stock has been doing your portfolio's heavy lifting, and the headline number hid it.

Wednesday flipped that pattern for a day, with tech in front and consumer discretionary at the back.

One strong day doesn't undo a six-week rotation.

Rates add to the pressure, with the 10-year Treasury yield at 5.01% on Thursday morning.

Higher yields tend to weigh hardest on the most richly valued growth stocks.

A Steady Basket of Basics

Walmart (WMT) rose 16% over the six weeks of our review.

It was one of the larger gains among big staples names, as investors moved toward defensive retailers.

It sells the groceries and household basics people buy in any market.

Walmart has a Weiss rating of B-, a BUY.

The Average Stock, in One Fund

If you'd rather own the average stock outright, the Invesco S&P 500 Equal Weight ETF (RSP) does exactly that.

Its Weiss rating is C+, a HOLD.

If you already own it, I'd keep it as a counterweight to your cap-weighted funds.

In the Weiss Ultimate Portfolio, which I edit, we hold several defensive service companies whose customers pay every month, AI or no AI.

That kind of business is exactly what the equal-weighted data has been rewarding.

Let the Ratings Do the Sorting

Every fund rating in this report came straight from the live Weiss Ratings pages.

Weiss Ratings Plus puts that same work in front of you, with real-time ratings, instant alerts on upgrades and downgrades, and exclusive analysis.

It's how you'll know the day a long Treasury fund earns a better grade.

And it's how you'll see our next move on U.S. debt as soon as we make it.

Click here to see what Weiss Ratings Plus can do for you.

The Record-Setter That Sells to Consumers

Apple is the name that sits on both sides of this divide.

The iPhone maker is filed under tech, but its customers are consumers.

In its fiscal fourth quarter, which ended Sept. 26, revenue rose 12%.

That came to $114.5 billion.

Earnings per share rose 14%.

iPhone sales set a September-quarter record, and Services revenue reached an all-time high.

That's consumer demand showing up inside a tech stock.

And the Cupertino company sells devices and services, not AI chips for data centers.

So it carries less of the spending risk that sank the chipmakers in our six-week review.

Apple closed Wednesday at a record $355.63.

It's up about 31% this year.

Apple has a Weiss rating of B, a BUY.

At a record price, I'd build a position in steps rather than all at once.

What I'm Watching

The next Weiss Sector Pulse, for whether consumer sectors keep their lead over tech.

The 10-year Treasury yield, and whether it holds above 5%.

Whether more Nasdaq stocks start setting new highs than new lows.

Whether Apple can hold its record as tech's rebound is tested.

Bottom Line

If you own an S&P 500 fund, Wednesday felt like a fine day, but the giants did most of the work.

Our six-week data says the average stock has been the quieter winner.

You can buy Apple, a BUY, for consumer strength inside tech.

You can buy Walmart, a BUY, for steadiness.

And if you own RSP, a HOLD, keep it.

Cheers!

Gavin