Stock market data shows many stocks never fully recover from drawdowns while few drive returns.
From Yahoo Finance: 2025-06-01 12:01:00
Stock market data reveals that the median stock often fails to fully recover from its drawdowns, with about 54% never returning to previous highs. On the flip side, a few high-performing stocks can drive significant portfolio returns. Meanwhile, broader market exposure can lead to substantial investment growth. CEO confidence has plummeted, with many expecting worsening economic conditions in the near future. Business investment activity has also declined, potentially signaling slower growth ahead. Imports have sunk significantly, likely impacted by adjustments to higher tariffs. The US trade deficit widened to a record level due to a surge in March and a decline in gold imports, alongside punitive tariffs on Chinese products. Inflation cooled slightly, with the PCE price index up 2.1% from a year ago. Consumer spending increased in April, with personal consumption expenditures hitting a record annual rate. Unemployment claims rose to 240,000, indicating potential economic growth. Consumer confidence improved in May, driven by expectations of better business conditions and employment prospects. However, consumers felt worse about the current job market. PMI: “The IHS Markit Flash U.S. Composite PMI Output Index rose from 55.9 in April to 56.2 in May, signaling a modest improvement in private sector business conditions. The latest reading was supported by a faster increase in new business intakes and a stronger rise in employment levels. However, supply chain disruptions persisted, leading to a marked increase in backlogs. Finally, cost inflation remained sharp, with output charges rising at a near-record pace.”
(Source: PMI)
For more on economic activity, read: Most people are not bullish on stocks 📉
Business confidence has improved in May, with current output growth picking up as well. The pause on higher rate tariffs has helped lift sentiment, although growth remains subdued. Most U.S. states are still growing, according to the Philly Fed’s State Coincident Indexes report. Near-term GDP growth estimates are positive, with the Atlanta Fed’s GDPNow model predicting a 3.8% growth rate in Q2. However, tariffs announced by President Trump threaten global trade and have implications for the U.S. economy and stock market. Earnings look bullish, demand is positive, but growth is cooling. Hard economic data continues to hold up, despite soft sentiment-oriented data. Analysts expect the U.S. stock market to outperform the economy, thanks to positive operating leverage and robust earnings growth. However, risks persist, including U.S. political uncertainty. Political uncertainty, geopolitical turmoil, energy price volatility, and cyber attacks are just a few of the risks that can cause short-term market volatility. Long-term investors should also be prepared for economic recessions and bear markets as they build wealth in the markets. Despite these challenges, there is no reason to believe that the economy and the markets won’t be able to overcome them over time. The long game remains undefeated, providing a streak of success that long-term investors can rely on. Always keep your stock market seat belts fastened for the ride. 1. Scientists have discovered a new species of dinosaur in Argentina, believed to be the largest land animal to ever exist. The dinosaur, named Patagotitan mayorum, weighed an estimated 69 tons and measured 122 feet long.
2. The United Nations has reported that over 820 million people worldwide are suffering from hunger, with Africa being the continent most affected. The report highlights the need for increased efforts to eradicate hunger and improve food security globally.
3. In tech news, Apple has officially unveiled its new iPhone 12 lineup, featuring 5G capabilities and a redesigned body. The phones are set to be released in the coming months, with pre-orders already available for the base model starting at $699.
4. As the COVID-19 pandemic continues to impact economies around the world, the International Monetary Fund (IMF) has predicted a global GDP contraction of 4.4% for 2020. The IMF warned that recovery will be uneven, with developing countries facing the greatest challenges in the post-pandemic world. 1. The stock market reached record highs today, with the S&P 500 closing at an all-time high of 4,500 points. This surge was driven by strong corporate earnings reports and positive economic data.
2. In international news, the United Nations reported that humanitarian aid has reached over 1 million people in Afghanistan, where a severe drought has left millions in need of assistance. The UN is calling for continued support to prevent a humanitarian crisis.
3. On the tech front, Apple announced a new iPhone model with 5G capabilities and improved camera features. The new device is set to be released next month and is expected to be a top seller.
4. In sports, tennis star Naomi Osaka made a strong comeback at the US Open, defeating her opponent in straight sets. Osaka’s performance has solidified her as a top contender for the title.
5. Lastly, a new study published in a medical journal found that the Pfizer-BioNTech COVID-19 vaccine is highly effective at preventing severe illness and hospitalization from the Delta variant. The study included data from over 10,000 patients and provides further evidence of the vaccine’s effectiveness.
Read more at Yahoo Finance: Identifying winning stocks is hard. Holding winning stocks is a nightmare.