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right now just 7 stocks account for 25-30% of the s&p 500 capitalization .
but things are starting to show signs of life in other indexes too …energy got a boost from the supposed oil cut backs and there is hope the fed will pause .
The Russell Mid-Cap Index rose 1.0%, and the Russell 2000 Small Cap benchmark gained 1.9%. for the week while the dow and s&p moved little at just .4% .
the inverted yield curve improved a bit as FREDS 5 year breakeven rate is a mere 2.15% as bond investors look out at future inflation
An interesting take from the WSJ about the limited bull market amid overall economic recession concerns.
"The S&P 500 has climbed nearly 12% this year and is poised to enter a new bull market after rising almost 20% from an October trough. Most major indexes in Europe are up more than 10% in 2023, with France’s CAC 40 among those that are hovering near all-time highs.
“If you look at the S&P 500 index level, you might be fooled into thinking that actually the market is doing really well, that activity is strong and that profit growth is in full recovery mode,” said Seema Shah, chief global strategist at Principal Asset Management. “But that would be quite an incorrect reflection of what’s going on under the surface.”
The past few years have been periodically marked by U.S. technology-stock dominance. But that grip has tightened recently. Eight of the largest tech and growth companies in the U.S.—Alphabet, Amazon, Apple, Meta, Microsoft, Netflix, Tesla and Nvidia—now account for 30% of the S&P 500’s market capitalization. That is up from about 22% at the start of the year.
One sign of narrowing breadth can be seen in how the S&P 500 has fared this year compared with its equally weighted counterpart, which gives equal sway to every company in the index. Compared with the traditional index’s 12% gain, the equally weighted version has added 1.8%. That is the largest-ever outperformance by the S&P 500 on a year-to-date basis, according to a Dow Jones Market Data analysis through June 6, based on data starting in 1990.
Lately, strategists have warned that a narrowing breadth is masking investor anxiety. Money managers have dumped shares of companies operating in economically sensitive industries, sending stocks as varied as Etsy, Boston Properties and Charles Schwab each down more than 20% this year."
An interesting take from the WSJ about the limited bull market amid overall economic recession concerns.
"The S&P 500 has climbed nearly 12% this year and is poised to enter a new bull market after rising almost 20% from an October trough. Most major indexes in Europe are up more than 10% in 2023, with France’s CAC 40 among those that are hovering near all-time highs.
“If you look at the S&P 500 index level, you might be fooled into thinking that actually the market is doing really well, that activity is strong and that profit growth is in full recovery mode,” said Seema Shah, chief global strategist at Principal Asset Management. “But that would be quite an incorrect reflection of what’s going on under the surface.”
The past few years have been periodically marked by U.S. technology-stock dominance. But that grip has tightened recently. Eight of the largest tech and growth companies in the U.S.—Alphabet, Amazon, Apple, Meta, Microsoft, Netflix, Tesla and Nvidia—now account for 30% of the S&P 500’s market capitalization. That is up from about 22% at the start of the year.
One sign of narrowing breadth can be seen in how the S&P 500 has fared this year compared with its equally weighted counterpart, which gives equal sway to every company in the index. Compared with the traditional index’s 12% gain, the equally weighted version has added 1.8%. That is the largest-ever outperformance by the S&P 500 on a year-to-date basis, according to a Dow Jones Market Data analysis through June 6, based on data starting in 1990.
Lately, strategists have warned that a narrowing breadth is masking investor anxiety. Money managers have dumped shares of companies operating in economically sensitive industries, sending stocks as varied as Etsy, Boston Properties and Charles Schwab each down more than 20% this year."
That's nuts. So if any of those 8 mega cap tech stocks pull back then the whole index will fall.
No not necessarily. If one of them falls but the others still rise or the remaining index rises how do you figure “the whole index will fall.” It’s like people don’t understand basic math on here.
"Inflation rose at a 4% annual rate in May, the lowest in 2 years"
Its all about expectations and looking into the future. If inflation is going down then you can predict in the future it will be back to normal levels.
"Inflation rose at a 4% annual rate in May, the lowest in 2 years"
Its all about expectations and looking into the future. If inflation is going down then you can predict in the future it will be back to normal levels.
Who is to say 4% inflation isn't already normal?
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