| The reordering of US equities
The US stock market did not quite make it pass the April high (2939.5). But Friday’s jump of 3.5% took the S&P 500 up 1.7% for the week, with energy stocks leading. The outperformance of equities and corporate bonds with high ESG ratings has been striking this year. Many of these companies are in information technology and communication services. Both sectors have outperformed again so far this month (up 3.53% and 2.09% respectively). IT is still showing a rise for this year (3.37%), the only S&P 500 sector that is in positive territory. The S&P 500 software index has climbed 14.7% so far this year. After rising 5.8% last week, Microsoft is only 2.1% below the February 10th high, and is up 17.1% so far in 2020. Other notable winners include Citrix Systems (up 36.1%, year-to-date), with its focus on software, cloud computing and remote working. Servicenow (up 33.9%), Nvidia (32.8%), Paypal (32.4%), Fortinet (28.2%), Jack Henry (22.5%) and Cadence Design Systems (18.9%) have all risen more than Microsoft. The pressure to re-open the economy will lead to a re-ordering of US companies, with IT and communication services outperforming, and old economy businesses in (terminal) decline. Summary
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