Daily Stock Market Articles

March Quarterly Options Expiration Week: S&P 500 and NASDAQ Up 12 of Last 17

March Quarterly Option Expiration Weeks have historically leaned bullish. S&P 500 has been up 27 times in the last 42 years while NASDAQ has advanced 25 times. More recently, S&P 500 and NASDAQ have both advanced 12 times in the last 17 weeks. But the week after is the exact opposite, S&P down 27 of the last 42 years—and frequently down sharply. In 2018, S&P fell –5.95% and NASDAQ dropped 6.54%. Notable gains during the week after for S&P of 4.30% in 2000, 3.54% in 2007, 6.17% in 2009, and 10.26% in 2020 appear to be rare exceptions to this historically poorly performing week.

 

A Less Than Magnificent Year


The Magnificent 7 group of stocks has seen a poor start to 2025. The group entered 2025 with premium valuations, and expectations for premium growth to continue. But earnings growth has only fallen in line with the broader market, and that represents a sharp slowdown compared to the group’s recent performance. Investors may be well served to ask whether new products coming to market may send the group’s growth rate higher for the remainder of the year.

The Magnificent 7 group of stocks has so far underperformed the broader S&P 500 in 2025. An equal weight portfolio of these stocks has returned -15% year to date, representing a large underperformance against the -5.9% return for the S&P 500 (FactSet data, as of 3/13/2025 closing prices). This result marks a sharp turnaround from the previous two years of stellar returns and notable outperformance for the group of technology-related stocks, as shown below. In fact, the tech sector is off to its second worst start to a year in the past decade, faring better than only 2022. You can see that displayed below by ranking % returns on a yearly basis.



A combination of high beginning valuations and cooling earnings growth for these companies may be to blame for their lackluster return. My colleague Grant Engelbart, VP, Investment Strategist recently charted technology’s premium valuation, both relative to its own history and against other market sectors. Premium valuations often demand premium fundamentals if investors expect to outperform the market while owning the stocks. But the Magnificent 7’s fundamentals have slowed down on a relative basis. Earnings revisions so far this year for the group have nearly mirrored the S&P 500 through the first 10 weeks. Analysts polled by FactSet expect the Magnificent 7 stocks to earn only 2.1% more over the next twelve months than they did at the beginning of the year, nearly the same as the 1.9% revision to the broader S&P 500, as shown below. With expected fundamental performance only on par with the broader market, investors have not been willing to pay a higher valuation.



The Magnificent 7’s current expected earnings growth is much slower than what powered the group to outperform in 2023 and 2024. With all companies in the group having reported their latest quarterly results, sell-side analysts polled by FactSet have only revised higher the group’s next twelve months’ (“NTM”) expected earnings per share (“EPS”) by 2.1% since the start of 2025. At this time in 2024, analysts had revised the Mag 7’s NTM EPS higher by 9.1%, and ultimately to 40% by the end of the year, which drastically outpaced the broader market. If the group’s positive 2024 EPS revisions represented ‘premium fundamentals’ and justified their higher valuations, 2025 fundamental performance has so far been less than premium.



Investors may be well suited to ask themselves whether this fundamental performance represents a maturation of the group’s growth drivers, or rather a temporary business performance slowdown before a resumption of earnings growth. I’m reminded of the growth transition that Nvidia is currently experiencing. After bringing new products to market that have powered the AI boom – and the earnings growth of some of its largest customers – the company’s latest earnings only met expectations. This has been driven by some delays and interruptions in the launch of its newest products but may prove transitory. It’s largest customers – such as Microsoft, Google and Tesla, to name a few – have also noted that they remain ‘supply constrained’ amidst the delay of Nvidia’s rollout and are eager to take delivery of more chips. If investors believe that, and that the delivery of these newer, higher powered products, may unlock future earnings growth, the less than magnificent year may be due for a turnaround.

2025 has been a ‘Less than Magnificent Year’ so far, with the group of Magnificent 7 stocks lagging the broader the S&P 500. Valuations for the group were high to start the year, and while valuation is a poor short-term timing tool, the elevated valuation suggested that investors expected their premium fundamental performance to continue outpacing the market. That hasn’t happened, as the group’s earnings revisions have only fallen roughly in line with the broader market. And that’s a sharp slowdown compared to 2024’s outperformance. Investors may be well served to ask if this is a temporary or sustained slowdown. New products coming to market may be able to rejuvenate the group for the remainder of 2025.

 

The Lag 7
Wed, Mar 19, 2025

Stocks are higher today ahead of the FOMC's interest rate announcement, Summary of Economic Projections (SEP), and the Powell press conference. Gains are good, but the S&P 500 is still down 8.1% from its 52-week high in February. While a decline of 8% sounds relatively modest, individual stocks in the index, especially the ten largest, have seen much larger declines. The chart below shows how far each of the ten largest stocks in the S&P 500 were trading from their closing 52-week high as of this morning. Of the ten, nine have seen pullbacks of at least 10%, and six of those have shed a fifth of their value. That's a bear market! The only stock bucking the trend has been Berkshire Hathaway (BRK/b), which was trading at 52-week highs this morning. When stocks representing more than a third of the entire S&P 500 are down a median of more than 20% from their respective 52-week highs, you can understand why some investors have been feeling more pain in their portfolios than the decline in the S&P 500 would suggest.



Of the ten largest stocks in the S&P 500, most still have rising 200-day moving averages (DMA), which would suggest their longer-term uptrends remain intact. The two exceptions are Microsoft (MSFT) and Alphabet (GOOGL). Both stocks have just recently seen their 200-DMA peak and start to roll over in the last few weeks.





Along with MSFT and GOOGL, Nvidia (NVDA) and Tesla (TSLA) are two stocks among the top ten where the 200-DMA is still rising, but it's coming really close to rolling over. Unless these stocks see a pretty big bounce in the days and weeks ahead, a rollover in their respective 200-DMAs is inevitable. That doesn't mean the stocks will continue to decline, but if the 200-DMA tends to act as resistance and it's also falling in the process, it doesn't present a good technical setup.

 

Four Reasons Not to Panic and Sell Right Now


“So, you’re telling me there’s a chance?” Lloyd Christmas in Dumb and Dumber

As I wrote about last week in Houston, We Have A Correction, Now What?, the S&P 500 has been volatile lately and recently moved into a correction (down more than 10%). Today I want to discuss a few more things you should know about stocks in a correction and why panicking right now and selling could be a bad investment decision.

Why a Quick Move into a Correction Could Be a Good Thing
If your head is spinning from being at an all-time high to down more than 10%, then you aren’t alone, as this was one of the quickest trips ever to do just that. In fact, it took only 16 trading days to achieve this dubious feat, but it turns out this isn’t really bad news.

We found six other corrections off an all-time high that took place in less than one calendar month (or about 21 trading days) and the good news is quick snapbacks are quite common. In fact, the S&P 500 has never been lower three and six months later, with an average return six months later of an extremely impressive 14.7%. Who said roller coasters weren’t fun?



What If This Isn’t the Next Bear Market?
We are on record that this won’t turn into a full-fledged bear market, which means stocks won’t be down 20% or more. That right there is a reason not to sell, but assuming that is the case, we found 12 other times stocks moved from an all-time high into a correction, but didn’t fall into a bear market. Looking into this showed stocks were higher six and 12 months later every single time, with much better than average returns as well.



What I found incredible is that five of those 12 times saw stocks bottom the day they moved into a correction (which in our case would have been Thursday). That is way more than I would have ever expected. Will we do it again? Well since we haven’t violated last Thursday’s low yet, to quote our friend Lloyd Christmas, I’m saying there’s a chance!

Friday and Monday Were Rare and Potentially Bullish
Some more good news and why you shouldn’t sell right now is we saw a potential buying thrust, consistent with higher prices coming. How do weak markets end? I like to say when the selling stops. Kind of obvious, but with all the negativity we’ve seen anyone who wanted to sell likely has done so, leaving only buyers. Well, the buyers showed up Friday and Monday, as both days saw more than 90% of the components of the S&P 500 higher. This is extremely rare but could be a clue a major low is in place or trying to form.

The last time we saw this was in early October 2022, right as that bear market was ending. You can see on the table below we’ve seen strong returns after previous buying thrusts, with the S&P 500 higher six months later 10 out of 11 times and up nearly 11% on average. This coupled with the data from above suggests the potential for better-than-expected returns over the next six months, which might surprise many investors who are positioned for the worst.



Here’s the same data but in the form of a nice chart of the S&P 500.



Lastly, a Valuable Reminder
We’ll leave you with this always popular reminder. If you miss out on the 10 best days of the year historically, you will miss out on significant gains. The catch is the best and worst days usually happen close to each other! So if you have to sell after the worst days, it likely means you will miss out on the eventual coming best days. We saw this just last week: Monday last week was the worst day of the year so far, but Friday was the best. Last year stocks gained more than 23% but if you missed the 10 best days that drops to less than 4%. Same thing for 2023. In fact, the average year since 2000 has gained 9.5%, yet drops to negative 12.5% if you missed the best 10 days of the year, a more than 20% drop!



We know this correction doesn’t feel good. Corrections never do. But understanding market history is an important aid in making the decisions needed to achieve long-term investing goals.

 

Market Bounce Has Room to Run

After being mauled by bears in the first half of the month, the market appears to have found some support just before mid-month. As of today’s close, March 19, month-to-date losses have been trimmed to DJIA –4.3%, S&P 500 –4.7%, NASDAQ –5.8%, and Russell 2000 –3.7%. This is notable improvement from the March 13 closing lows when losses ranged from –6.9% by DJIA to –8.2% from NASDAQ. Based upon March’s seasonal trend over the recent 21 years, the current market bounce does have room to continue through the end of the month.

 

Historic Dividend Outperformance
Thu, Mar 20, 2025

In pulling up our Trend Analyzer tool, one thing that is clear when looking at US thematic ETFs is where the damage has been done during the latest correction. For year to date performance, the biggest losers are now mostly growth factors, whereas low volatility and dividend focused ETFs are actually still in the green so far in 2025. Of course, dividend ETFs have a variety of methodologies. Some ETFs only have holdings with the highest yields, whereas others focus on quality of dividends, placing preference on things such as dividend growth and longevity. One of the most well-known dividend strategies is owning Dividend Aristocrats, of which the NOBL ETF tracks. Dividend Aristocrats only includes stocks that have raised their dividend payments for a minimum of 25 straight years.

In the 5 years since the COVID Crash low, growth stocks have been the primary driver of the market, especially since the start of the AI boom beginning in late 2022. However, the performance of the Dividend Aristocrats has still been respectable. Over the past five years, the S&P 500 (SPY) has gained 167% versus the 117% total return for the Dividend Aristocrats ETF (NOBL). Looking more recently, NOBL actually peaked ahead of the market in late November compared to the mid-February high for the broader market. Since their respective 52-week highs, NOBL is down a smaller 5.6% versus 7.12% for SPY. Additionally, looking only at the past month's more tumultuous period since the S&P 500's 2/19 high, NOBL is down only 0.5% to the S&P 500's 7% drop.



In other words, even though they peaked earlier and are down only slightly less from highs, as designed, the Dividend Aristocrats have been much less volatile during the latest stock market rough patch.

While the qualification to be included in the Dividend Aristocrats is to have raised dividend payments for at least 25 years, at the moment the 69 holdings in NOBL have on a median basis raised dividends for 42 consecutive years. In the table below, we show those members that have posted the largest gains year to date in addition to their market caps, current dividend yield (and whether that is a larger or smaller yield than the S&P 500), and length of raised dividends. As shown, utility-provider Con Ed (ED) is up the most with a year-to-date gain of 20.6% while boasting a dividend yield that is more than twice as large as the S&P. It has also passed the half century mark for increased dividends. Other notable Aristocrats that are up more than 10% year-to-date include Chevron (CVX), Johnson & Johnson (JNJ), Coca-Cola (KO), and IBM. You can view a tear sheet that lists all of NOBL's holdings and the number of years in a row that each of them has raised dividends at this PDF.

 

End of Q1 – Prone to Volatility and Weakness since 1990

Over the past 35 years the DJIA has declined 22 times and advanced 13 with an average loss of 0.62% near the end of March. S&P 500 has a similar track record. Excluding advancing years, the average decline is right around 1.5% for DJIA and S&P 500. End-of-quarter portfolio restructuring likely plays a role as managers lock in any gains and look to establish positions for the next quarter. These declines can begin on either the fourth-to-last trading day or the third.

Market weakness dominated the end of March from 1990 through 2009. From 2010 to 2017/2018 DJIA and S&P 500 largely bucked the previous trend and improved the recent 21-year trend in March. More recently late-March selling appears to be staging a comeback.

As of the market’s close yesterday (March 20), DJIA and S&P 500 were down 4.3% and 4.9% respectively this March. Historically end-of-Q1 weakness has occurred regardless of how strong or weak the month had been. In 2009 DJIA was up 12.20% and still declined 3.98% over the last three trading days. DJIA was down 11.24% in 2020 and lost another 2.82% at month’s end.

 

Stocks Rarely Peak in February and Five Other Things to Know Right Now


“If everybody is thinking alike, somebody isn’t thinking.” -General George S. Patton

Last week, we discussed how the S&P 500 officially moved into a correction, which is down 10% from the February 19th peak. We noted then that most years (even some of the best years) see volatility and scary headlines, with many of those years seeing a 10% correction at some point in the year.

So did stocks officially peak for the year on February 19th? We don’t think so and we still expect stocks to come back to new highs at some point during this year. To back this up, only twice over the past 75 years did stocks peak for the year in February. Yes, most years peak in January or December, but for many reasons we’ve noted lately (and more below), we don’t think this will be the third year stocks peak in February.



Two Reasons to Expect New Highs Later This year
We’ve pointed these two things out recently, but wanted to share them again as they are important.

If your head is spinning from being at an all-time high to down more than 10%, then you aren’t alone, as this was one of the quickest trips ever to do just that. In fact, it took only 16 trading days to achieve this dubious feat, but it turns out this isn’t really bad news.

We found six other corrections off an all-time high that took place in less than one calendar month (or about 21 trading days) and the good news is quick snapbacks are quite common. In fact, the S&P 500 has never been lower three and six months later, with an average return six months later of an extremely impressive 14.7%. Who said roller coasters weren’t fun?



We are on record that we don’t believe this one will turn into a full-fledged bear market, which means stocks won’t be down 20% or more. That right there is a reason not to sell, but assuming that is the case, we found 12 other times stocks moved from an all-time high into a correction, but didn’t fall into a bear market. Looking into this showed stocks were higher six and 12 months later every single time, with much better than average returns as well.



What I found incredible is that five of those 12 times saw stocks bottom the day they moved into a correction (which in the current case would have been Thursday, March 13th). That is way more than I would have ever expected. Will we do it again? After the rare bullish clue we recently saw (more on this below) we think there’s a chance.

Some More Good News
Some more good news and why you shouldn’t sell right now is we saw a potential buying thrust, consistent with higher prices coming. How do weak markets end? I like to say when the selling stops. Kind of obvious, but with all the negativity we’ve seen anyone who wanted to sell likely has done so, leaving only buyers. Well, the buyers showed up Friday, March 14 and Monday, March 17 as both days saw more than 90% of the components of the S&P 500 higher, a very impressive back-to-back feat. This is extremely rare but could be a clue a major low is in place or trying to form.

The last time we saw this was in early October 2022, right as that bear market was ending. You can see on the table below we’ve seen strong returns after previous buying thrusts, with the S&P 500 higher six months later 10 out of 11 times and up nearly 11% on average. This coupled with the data from above suggests the potential for better-than-expected returns over the next six months, which might surprise many investors who are positioned for the worst.



Not All Corrections Become Bear Markets
We found 13 official bear markets (down 20% from recent highs) going back to World War II, with many asking whether this could be number 14. We don’t think so, but a nice way to show this is to highlight that most corrections don’t become bear markets.

We found only 13 of the previous 39 corrections eventually turned into bear markets. Or as we like to say, all bear markets started as a correction, but not all corrections turn into a bear market.



Panic Is in the Air
We’ve noted many times the past few weeks that fear is in the air and from a contrarian point of view this could be very bullish, as nearly anyone who wanted to sell has probably sold by now. One example of this is the American Association of Individual Investors (AAII) Sentiment Survey has had bears above 55% for four weeks in a row, besting the previous record of three weeks in a row that ended the week the Great Financial Crisis ended in March 2009. Yes, investors are potentially more worried now than after a generational crash and recession.

Purely anecdotal, but many investors are scared and want nothing to do with stocks. I know I’ve heard from many friends and family who share this same sentiment, as all they’ve heard in the media is how bad everything is out there.

Shoutout to Ben Carson for this find, but a recent Wall Street Journal article interviewed regular investors and the sentiment was quite negative. Below caught my attention:

For years, Yoram Ariely hadn’t touched most of his investments, preferring to ride the stock market’s ups and downs. Last Tuesday, he decided he had enough.

The 82-year-old unloaded almost half of his stock investments, fearful of the effects of President Trump’s economic agenda, and tariffs in particular. He may get rid of more still

“The decisions are changing daily,” said Ariely, a retired business owner in Longboat Key, Fla.

So we have surveys and anecdotal sentiment at extremes, but what about people who manage real money? The recent Bank of America Global Fund Manager Survey showed the largest drop ever in US equity allocations last month. That’s in the chart below, but the recent monthly survey also saw the second largest decrease in global growth expectations ever, the largest increase in allocations to cash since March 2009, and the lowest allocation to US equities since June 2023.



Why a Big Drop This Year Is Still Not Likely
The last thing that’s caught my attention lately is how rare it is to see stocks down 10% for an entire calendar year. Given many investors are expecting a big down year, could it really happen? Going back the past 100 years, stocks were lower by more than 10% for the full year only 12 times (on a total return basis) and as you can see, big drops usually happen for a reason. In other words, something bad has to happen. Could something bad happen this year? Of course, but for now, we still don’t see any compelling reason to expect a major recession or any reason for something very bad to happen.

 

10 Baggers and 100 Baggers
Tue, Mar 25, 2025

Yesterday was the 25th anniversary of the S&P 500's closing high during the Dot Com Bubble. After rallying 14% in the month leading up to its peak on 3/24/2000, the S&P would go on to fall 25% over the next year and 49% at its low point in October 2002.



Had you bought the S&P 500 at the peak on 3/24/2000, you would have felt like the worst market timer in the world a year later. But eventually the market recovered, and if you rode it out and held through today, you would still have generated annualized gains of more than 7.5% if you bought on the day of the Dot Com Bubble peak. As the saying goes: time heals.

Within the Russell 1,000 (a larger large-cap index than the S&P 500), just over half of the stocks in the index now were around 25 years ago. These stocks have posted an average total return of more than 2,600% since 3/24/00. Just under 300 stocks in the index have been "10-baggers" in the last 25 years, meaning they've gone up 10x. But there are also nineteen stocks in the index that have been "100-baggers" since 3/24/00, meaning they've gone up at least 10,000%.

Below is a list of these nineteen "100-baggers." For each stock, we provide its percentage change since 3/24/00, how much a $1,000 investment in the stock on 3/24/00 would be worth today, and a brief one-sentence description of what the company does.

While you may think that Tech stocks would dominate the list of biggest winners over the last 25 years, that's not the case. Of the nineteen "100-baggers," just four are in the Technology sector, while there are five Industrials and five Consumer Discretionary stocks.

The biggest winner by far, though, is a Consumer Staples stock: gas-station/convenience store energy-drink maker Monster Beverage (MNST). A $1,000 investment in MNST on 3/24/00 would be worth -- wait for it -- $1.275 million today! That's double the return of the second-best performer -- NVIDIA (NVDA).

Notably, Apple (AAPL) is the second-best performing Tech stock behind NVDA with a gain of 20,821%. It's the stocks that sit just above and below Apple that are more interesting. Just above AAPL sits a farming supply retailer -- Tractor Supply (TSCO) -- with a gain of 26,036%, while an auto parts retailer -- O'Reilly Auto (ORLY) -- sits just below AAPL with a gain of 16,381%.

Below are some of the things that other 100-baggers do:

-Provides less-than-truckload freight shipping services (ODFL)

-Makes commercial and residential kitchen equipment (MIDD)

-Develops credit scoring and analytics software (FICO)

-Offers hazardous waste disposal and environmental services (CLH)

-Distributes HVAC equipment and refrigeration products (WSO)

-Provides kidney dialysis and healthcare services (DVA)

Good businesses that can execute can be found in any industry!



Along with the 25th anniversary of the Dot Com Bubble, 3/23 was the fifth anniversary of the market's low point during the COVID Crash in 2020. Along with highlighting 100-baggers over the last 25 years, below is a list of stocks that have been 10-baggers (up at least 10x) in the last five years since the COVID low.

What's most remarkable about this list is how many Energy stocks there are. Four of the five biggest winners are domestic oil and natural gas stocks: Antero Resources (AR), Targa Resources (TRGP), Matador Resources (MTDR), and Permian Resources (PR). Antero is up the most with a gain of just under 5,000%. The only non-Energy stock in the top five is bitcoin-holder MicroStrategy (MSTR), which is up 2,867% since 3/23/20.

Rounding out the top ten are video-game seller GameStop (GME), server-seller Super Micro (SMCI), energy-drink maker Celsius (CELH), AI chip-king NVIDIA (NVDA), and another oil and gas play: Ovintiv (OVV).

Other notables on the list of 10-baggers over the last five years include Dick's Sporting Goods (DKS), Vertiv (VRT), Dillard's (DDS), Comfort Systems (FIX), Vistra (VST), Quanta Services (PWR), Builders FirstSource (BLDR), and Broadcom (AVGO).

 

April is the second-best month for S&P 500 and DJIA

April 1999 was the first month ever to gain 1000 DJIA points. However, from 2000 to 2005, “Tax” month was hit, declining in four of six years. From 2006 through 2021, April was up sixteen years in a row with an average gain of 2.9% to reclaim its position as the best DJIA month since 1950. DJIA’s streak of April gains ended in 2022’s bear market declining 4.9% that year and 5.0% again in 2024. April is now the second-best month for DJIA (+1.8%) and S&P 500 (+1.5%) since 1950 and fourth best for NASDAQ (+1.3%) since 1971.

In post-election years, April remains a top performing month ranking second best for DJIA and S&P 500, and third best for NASDAQ. Average gains since 1950 for DJIA and S&P 500 are comparable to all years, but notably improve for NASDAQ, Russell 1000 and Russell 2000. NASDAQ’s three post-election year April declines were in 1973, 1993 and 2005.

 

Taxes Schmaxes – April Strong Open to Close – Deadline Impact Fades

The first half of April used to outperform the second half, but since 1994 that has no longer been the case. The effect of April 15 Tax Deadline appears to be diminished with bullish days present throughout April. Traders and investors appear to be more focused on first quarter earnings and guidance throughout the entire month of April.

As you can see in the above chart of the recent 21-year market performance in April and post-election years since 1950, April has historically been nearly perfect with gains steadily building from the first trading day to the last with only the occasional and minor blip along the way. In post-election years, April does tend to open on the soft side, but the early dip has historically been shallow and brief.