There has been something of a changing of the guard going on in the stock market this month. Stocks that had done the best over the past year have been hit and stocks that have done the worst have been lifted up. You can see this reversal of fortunes in the chart below.
Here are the numbers:
The Russell 1000 is up 2% this month
Going into September, 39 stocks were up at least 50% or more over the previous 12 months. Those stocks on average are down 9.7% this month. Only 4 are positive.
Going into September, 42 stocks were down at least 50% or more over the previous 12 months. Those stocks on average are up 6.4% this month. Only 9 are negative.
If this trend were to continue, it would have significant ramifications for factor portfolios. I expect market participants will be watching this closely.
Michael Batnick is a managing partner at Ritholtz Wealth Management. He is the co-host of Animal Spirits, What Are Your Thoughts, and The Compound and Friends. For disclosure information please see here.