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The S&P 500 is now up just 1% YTD in price terms. That is almost entirely due to tech stocks and health care. Consumer discretionary is up, almost entirely because Amazon is a component and is up 50%.

Defense stocks (healthcare, telecom, and utilities) are all up, although telecom got beaten up today after AT&T’s profit miss. If tech stumbles, we will be somewhere between a correction (-10%) and a bear market (-20%).

The chart below shows the contribution to overall percent change in the S&P index year to date (total return multiplied by index weight. Remarkably, four tech stocks together account for a 4.5% overall gain in the S&P. Amazon and Apple alone account for 3%. Laggards are less concentrated.

The S&P 500 lost about 6% during October. Contributions to the decline are far less concentrated, although Amazon still leads.

Again, this suggests that a major setback for a handful of market leaders would have severe consequences for the overall market.

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