White-Hot Stock Rally Masks Mammoth Value Swings

Explosive moves in individual stocks and sectors are underpinning a white-hot streak in the market.
Major U.S. stock indexes have kicked off the second quarter with a bang, powering higher and building on a blockbuster rally that began in March of last year. The market’s ascent since then has been nearly relentless, pushing the S&P 500 to 17 new highs in 2021 and recently hurtling past the index’s 4000 mark for the first time. The Cboe Volatility Index, a gauge of stock volatility based on options priced on the S&P 500, recently closed at its lowest level in more than a year.
Yet under the surface, the market values of stocks within the S&P 500 are shrinking or swelling at a rate approaching the first half of 2020, when volatility soared at the start of the Covid-19 pandemic. That is according to Bank of America Corp. analysts who parsed the 50 largest shifts—higher or lower—in market value among companies in the S&P 500 as a percentage of the index’s total market value.
Mammoth swings have grown more common across the stock market even as major indexes keep touching records. And they haven’t been limited to stocks such as GameStop Corp., which soared more than 2,000% this year before fizzling, or ViacomCBS Inc., which lost more than half its value in a few days in the midst of the blowup of Archegos Capital Management.
Apple Inc., for example, gained $265 billion in market value—more than what all of Coca-Cola Co. is currently worth—in five sessions ahead of its January earnings report. Nvidia Corp. and PayPal Holdings Inc. each fell about $56 billion in market value in just days in March, according to Bank of America.

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