US Quarterly Chartbook
S&P 500 returns +11% in 1Q 2024 as rally broadens beyond mega-cap tech
Table of Contents
- Intro
- The market in 2024
- Tale of the tape: Best and worst S&P 500 index return contributors and performing stocks in 2024
- Where to find sales and EPS growth in 2024
- Sector capitalization of the S&P 500 has shifted significantly over time...
- ...but has not always correlated with the proportionate contribution to net income
The S&P 500 returned 11% in 1Q 2024 reaching a new all-time high and posted the strongest 1Q return since 2019. While strong performance by several of the largest mega-cap tech stocks (MSFT, NVDA, AMZN, GOOGL, META) helped lift the index, market breadth improved in 1Q and the equal-weight S&P 500 also rose (+7%). Components of the YTD return included +295 bp from better earnings expectations, +721 bp from a 7% expansion in the forward P/E multiple to 21x, and +40 bp from dividends. The index was led by Comm. Services (+16%) while Real Estate (-1%) fared the worst. Underneath the surface Cyclicals outperformed Defensives by 5 pp in 1Q as the market continued to price an optimistic growth outlook amid firm economic data. In 2024, we expect S&P 500 EPS will rise by 8% but the index will remain flat at 5200 as the P/E multiple contracts slightly from its current level.
2024E Sales Growth: Fastest mega cap sales growth: NVDA, MU, AVGO, LLY, NOW
2024E Earnings Growth: Fastest mega cap EPS growth: MRK, LLY, NVDA, GE, PGR
Largest S&P 500 stocks by equity cap: MSFT, AAPL, NVDA, AMZN, GOOGL
Lowest Valuation S&P 500 stocks by P/E (NTM): VTRS, UAL, GM, AAL, EG
Lowest Valuation S&P 500 stocks by EV/EBITDA (LTM): WBD, APA, UAL, VLO, BG
Best YTD performance: SMCI, NVDA, CEG, DECK, MU
Worst YTD performance: TSLA, BA, CHTR, MKTX, HUM
Source: FactSet, Goldman Sachs Global Investment Research
The market in 2024
Exhibit 1: What sectors, styles, and strategies are working in 2024?
as of March 31, 2024
Source: FactSet, MSCI, Lipper, HFR, Goldman Sachs Global Investment Research
Tale of the tape: Best and worst S&P 500 index return contributors and performing stocks in 2024
Exhibit 2: Top and bottom contributors to YTD S&P 500 return
as of March 31, 2024
Source: FactSet, Goldman Sachs Global Investment Research
Exhibit 3: Best and worst performing S&P 500 stocks YTD
as of March 31, 2024
Source: Goldman Sachs Global Investment Research
Where to find sales and EPS growth in 2024
Where to find sales growth in 2024
Exhibit 4: The 100 largest stocks in the S&P 500 ranked by 2024E sales growth (excludes Financials, Utilities, and Real Estate)
as of March 31, 2024
Source: FactSet; compiled by Goldman Sachs Global Investment Research
Where to find EPS growth in 2024
Exhibit 5: The 100 largest stocks in the S&P 500 ranked by 2024E EPS growth
as of March 31, 2024
Source: FactSet; compiled by Goldman Sachs Global Investment Research
Sector capitalization of the S&P 500 has shifted significantly over time...
Exhibit 6: Sector composition of the S&P 500 by equity capitalization, 1975-2024
as of March 31, 2024
Source: Compustat, FactSet, Goldman Sachs Global Investment Research
...but has not always correlated with the proportionate contribution to net income
Exhibit 7: Net Income contribution by sector to S&P 500, 1975-2024
as of March 31, 2024
Source: Compustat, FactSet, Goldman Sachs Global Investment Research
Exhibit 8: Comparative sector composition of major US equity market indices
as of March 31, 2024
Source: FactSet, Goldman Sachs Global Investment Research
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