2019 will be a historic year for the S.P. 500, with two stocks contributing the most. Apple and Microsoft are up 85 percent and 55 percent respectively this year, according to the S.P. Dow Jones Index, which together contributes nearly 15 percent to the 2019 gain in the Standard and Poor’s 500-stock index. This year they have more influence on this capital-weighted index than the eight biggest contributors, second only to them combined. As of Monday, the Standard and Poor’s 500 index was up 28 percent this year.
This year’s epic performance by the super-tech portfolio has also pushed its market capitalisation to more than a staggering $1 trillion, making it the only two US companies in the elite market cap club.
Apple’s shares are on the verge of their best year since 2009 as investors allay concerns about a trade war and favor Apple’s services and wearables business. With the launch of Apple TV Plus, Apple Watch and Airpods, Apple has managed to offset some of the blows from falling demand for the iPhone. Expectations for the upcoming 5G cycle have also boosted the stock.
Apple’s rally also challenges analysts’ wisdom. In fact, Apple has the biggest increase in analyst selling ratings this year, according to Bespoke Investment Group.
Not surprisingly, Microsoft has become another of the biggest contributors to the index this year. The software maker’s core PC business, as well as Windows business products, cloud services and gaming, all saw strong growth. Earlier this year, Microsoft also beat Amazon (1847.84, 0.95, 0.05%) to grab a competitive $10 billion defense contract.
Bank of America (35.22, 0.07, 0.20%) listed Microsoft as one of the best software stocks in 2020, saying growth in its cloud computing business could drive growth next year. The stock is also on track for its best performance since 2009.
The 2019 gain in the S.P. 500 was the highest since 2013, but it could be even more historic if U.S. stocks continue to rise on Tuesday, just one percentage point from its best year since 1997.