Summary

  • 86% (432 of 500) of stocks in the S&P 500 rose during the week ended June 5, 2020. The “reopening” theme continued to gain steam, and financial leverage was the dominant factor. The highly indebted Oil Services group led the way, up 29% for the week, airlines rose 28%, Oil Producers gained 19% and the Bank sector rose 15%.
  • The top 50 performers in the S&P 500 rose an eye-popping 26% on average, including American Airlines (+67%), Occidental Petroleum (+50%) and United Airlines (+43%). These would normally qualify as an entire year’s worth of performance, not one week, but 2020 has proven to be anything but normal.
  • The most effective quant factors in stock performance for U.S. stocks last week were Volatility, Leverage, Sentiment and Dispersion. Essentially, the more indebted the company and the more its stock had fallen during Q1, the better the stock performed last week. “Value” continued its bounce, though remains a detractor to performance YTD (-14%).
  • The Buyback Kings (the 50 S&P 500 stocks with the highest buybacks in place relative to market cap) rose 18% for the week on average. As an overall market factor however, Buybacks were a slight detractor to performance.
  • For the YTD 2020 through June 5, the top 50 stocks in the S&P 500 are up 24.6% YTD on average, and 39 of these top 50 scored a “1”, or our highest ranking on Trend1, and have very limited share buybacks in place (3% of market cap, on average, vs. 26% for the Buyback Kings).

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