Top S&P 500 Stocks During Market Downturn

Chart of Top S&P 500 Stocks During 4th Quarter Market Downturn
Chart of Top S&P 500 Stocks During 4th Quarter Market Downturn – Source: TheTechnicals.com and TradingView

Persistently high market volatility and sharp, sudden declines in the stock market have come to be expected since early October. Investors have become weary during this very challenging fourth quarter of the year. Now, it seems the market roller coaster only has scary drops and not much in the way of exhilarating climbs.

Judging from the declines in the major stock indexes, it also may seem like every single stock has taken a major beating since early October. Of course, this is not the case. There have actually been some bright spots in this latest market turbulence, though not as many as investors would like.

Stocks Defying the Market Correction

Here, we take a look at some of the top-performing individual stocks in the S&P 500. These stocks have defied this market downturn and have actually risen this quarter, some dramatically. We’ve mentioned some of these strong movers before, and they’ve continued to show bullish resilience even as the overall market falls.

  • Red Hat, Inc (RHT)
  • SCANA Corporation (SCG)
  • Twitter, Inc. (TWTR)
  • Starbucks Corporation (SBUX)
  • TripAdvisor, Inc. (TRIP)

Of course, the benchmark that we use to measure these high-flying S&P 500 companies against is none other than the S&P 500 itself. This is represented by the SPDR S&P 500 ETF, or SPY. As a benchmark, SPY has fallen a full 12% (as of Tuesday’s market close) since the beginning of October when the carnage began, and is now down more than 4% year to date.

Red Hat, Inc. (RHT)

The top company on our list, Red Hat is an open-source software company. Its stock ran up around 50% on one late-October day after IBM announced a $34 billion deal to buy the company. Since early October, RHT is up over 29%, and over 46% year to date.

SCANA Corporation (SCG)

SCANA is an energy-based holding company that provides electric and natural gas utilities to customers in South Carolina and neighboring states. Since early October, SCG is up over 25%, and over 22% year to date.

Twitter, Inc. (TWTR)

It’s the stock that some investors love to hate. But for the past couple of months, and even from the beginning of the year (for the most part), the social networking company has been easy to like. Since early October, TWTR is up over 18%, and over 40% year to date.

Starbucks Corporation (SBUX)

Everyone knows Starbucks for their coffee. But what many investors also know is that the company’s stock has been on a sharp uptrend since July of this year. And it’s been rising even during the market downturn of the past few months. The stock gapped up sharply after its earnings release on November 1. Since early October, SBUX is up over 14%, and over 13% year to date.

TripAdvisor, Inc. (TRIP)

TripAdvisor is a travel website that focuses on hotel and restaurant reviews and bookings. The stock has been in a strong uptrend for most of the year, but the trend accelerated in October, culminating in a bullish gap after the company’s early-November earnings beat. Since early October, TRIP is up over 13%, and a whopping 68% year to date.

The Fed

Wait, huh? Why are we mentioning the Federal Reserve in a discussion about top S&P 500 stocks this quarter? We would be remiss if we neglected to mention the big event happening on Wednesday – the heavily anticipated FOMC decision. This is where the Federal Reserve, or the Fed, decides on whether to raise interest rates again or not. The Fed will also provide its outlook for monetary policy and economic projections going forward.

What the Fed does and says will very likely make a significant impact on stocks, including those on our list above. The markets are mostly expecting a rate hike on Wednesday. It’s the outlook that’s much more uncertain. Here are some extremely simple scenarios of what may happen and our expectations for the stock market for each scenario:

  • (Most Likely Scenario) The Fed raises interest rates but signals a slower pace of rate hikes in 2019 and beyond: MODERATELY BULLISH for stocks
  • (Less Likely Scenario) The Fed raises interest rates but signals a continued brisk pace of rate hikes in 2019 and beyond: BEARISH for stocks
  • (Least Likely Scenario) The Fed does not raise interest rates: BULLISH for stocks

IMPORTANT: The information above should not be construed as investment advice and should not be considered as a solicitation to buy or sell securities. Trading and investing in the financial markets involves substantial risk of loss, and may not be suitable for all investors.

Disclosure: At the time of this article’s publication, we have no position in any security or trade/investment mentioned, nor do we have any business relationship with any company whose stock may be mentioned.

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