Financials weathered the 2022 equity storm better than some of its peers, but the big macroeconomic concerns, in the near-term, surround the possibility of a recession. Recent data has emboldened the notion that inflation has peaked. But a rebound in commodity prices could serve to reignite higher inflation expectations. What’s that mean for bank stocks?

The largest constituents in the S&P 500® Index tend to represent a significant portion of its total return profile, while the largest constituents in the NASDAQ-100® Index deliver an even higher percentage of the index’s total return given its smaller basket. Usually, this concentration is a good thing, as big names such as Microsoft, Apple, and Amazon deliver strong returns, but in 2022, not so much. In fact, both Microsoft and Apple were down nearly 30% in 2022, but remained the top two holdings in both the NASDAQ-100® Index and S&P 500® Index, with over 10% and over 5% weight, respectively.