In a word Tuesday, Barclays questioned whether or not the S&P 500 (SPX) and S&P 500 Equal-Weight (SPW) can maintain their present efficiency, citing a historic sample of back-loaded returns.
“SPX/SPW returns are traditionally back-end loaded,” the analysts word, highlighting 2023’s “slim, front-end heavy rally” as an exception. With the primary half of 2024 mirroring 2023’s pattern, Barclays expresses concern in regards to the potential to keep up this tempo.
Traditionally, the S&P 500 tends to underperform its equal-weighted counterpart within the first half, adopted by a interval of outperformance within the second half. This aligns with the S&P 500 usually delivering stronger returns within the second half in comparison with the primary.
Barclays attributes the atypical efficiency in 2023 to “extraordinary market focus” pushed by expertise and AI hype. This led to a surge in early 2023, adopted by a sluggish second half as a consequence of heavy publicity to expertise and danger aversion in October.
Given the same tendencies within the first half of 2024 and the expectation of convergence in earnings progress between Massive Tech and the broader market, Barclays questions if the S&P 500 can outperform the S&P 500 Equal-Weight transferring ahead.
