Igy - nice post but you missed Hussman Strategic - down 10%!
Sally, I think the main thrust of that tweet is that nearly nothing is positive YTD other than those big eight tech stocks. I don’t know to what degree that is true; I worked part way down the list of biggest components of the DOW and didn’t find anything positive on the year until I got to CAT, which flashed green today after a big daily jump. Everything bigger was red on the year. I only went 7 or 8 deep, though, so not a deep dive. Curious to know, though, if anyone can say… how many SP500 stocks are down, YTD?
Russell 2000 Smallcap and S&P400 Midcap indexes are both positive on the year, so it's clearly not just a couple large cap tech stocks driving the market higher.
This popular poster suggested that we listen to the leading economic indicators and expect a recession.
The post was in January 2023, predicting a recession in June. Nah.
Alf @MacroAlf New lows for the US Leading Indicator index. This indicator has a 100% hit rate on anticipating recessions with a 7-8 months lag. It's now pointing to a recessions starting in Q2, and on par with the 2001 recession. Markets, in the meantime: Soft landing & La-La Land
Correct me if I'm wrong, but doesn't the Fed do their announcement on rate hike in the next few minutes about rate hike? News conference with Jerome Powell a half hour later (2:30 PM EST).
Sally, I think the main thrust of that tweet is that nearly nothing is positive YTD other than those big eight tech stocks. I don’t know to what degree that is true; I worked part way down the list of biggest components of the DOW and didn’t find anything positive on the year until I got to CAT, which flashed green today after a big daily jump. Everything bigger was red on the year. I only went 7 or 8 deep, though, so not a deep dive. Curious to know, though, if anyone can say… how many SP500 stocks are down, YTD?
Russell 2000 Smallcap and S&P400 Midcap indexes are both positive on the year, so it's clearly not just a couple large cap tech stocks driving the market higher.
Like I showed half way down the last page, the majority of S&P 500 companies are positive YTD (slightly more than 50%).
Russell 2000 Smallcap and S&P400 Midcap indexes are both positive on the year, so it's clearly not just a couple large cap tech stocks driving the market higher.
Like I showed half way down the last page, the majority of S&P 500 companies are positive YTD (slightly more than 50%).
this isn't really fair....equal-weight vs market cap sp500 shows a very large discrepancy that shows that a very small number of stocks is pulling the index. Just being positive doesn' tmean much.
Fed announces currently pausing interest rate hikes.
but they say they want to hike more in the future.
interest rates rising in response. Will be interesting to see if that hurts stocks.
Weird that the fed paused but says it will hike down the road. Why not now?
Probably they are just jawboning and have no real interest in more hikes.
I think they keep saying they want to see the data indicating the impact of their previous hikes on the easing of inflation and on labor rates. Probably want to be cautious they don't throw the economy into a recession, or at least not a big one.
Like I showed half way down the last page, the majority of S&P 500 companies are positive YTD (slightly more than 50%).
this isn't really fair....equal-weight vs market cap sp500 shows a very large discrepancy that shows that a very small number of stocks is pulling the index. Just being positive doesn' tmean much.
but they say they want to hike more in the future.
interest rates rising in response. Will be interesting to see if that hurts stocks.
Weird that the fed paused but says it will hike down the road. Why not now?
Probably they are just jawboning and have no real interest in more hikes.
I think they keep saying they want to see the data indicating the impact of their previous hikes on the easing of inflation and on labor rates. Probably want to be cautious they don't throw the economy into a recession, or at least not a big one.
yeah and the treasury has to sell circa a trillion dollars of bonds very soon...hate to think it but maybe the fed wants to hold rates down for that purchase? Sort of accusatory but still...
Conference now in process and Powell being questioned why not raising now since inflation still too high, and he is just now saying that no decisions made yet about direction of next couple of meetings, but he did indicate hikes likely later this year, and I believe he said a couple of them.
I think they keep saying they want to see the data indicating the impact of their previous hikes on the easing of inflation and on labor rates. Probably want to be cautious they don't throw the economy into a recession, or at least not a big one.
yeah and the treasury has to sell circa a trillion dollars of bonds very soon...hate to think it but maybe the fed wants to hold rates down for that purchase? Sort of accusatory but still...
chair is saying they didn't hike this month because they are so close to the top of rates that they don't need to move quickly...they have some luxury to wait and see. The process is working and 25 bps won't make much difference, so why not wait.
OER, energy, labor, commodities, food will all rollover as the economy contracts…of course if you believe everything is OK, then you would have an opposite scenario…of course the AI benign outcome of virtuous cycle is likely fantasy…
OER, energy, labor, commodities, food will all rollover as the economy contracts…of course if you believe everything is OK, then you would have an opposite scenario…of course the AI benign outcome of virtuous cycle is likely fantasy…
Consensus opinion on the street is that a recession is more likely than not in 2023, though hopefully mild. One would think that this is already factored into current markets.
Like I showed half way down the last page, the majority of S&P 500 companies are positive YTD (slightly more than 50%).
this isn't really fair....equal-weight vs market cap sp500 shows a very large discrepancy that shows that a very small number of stocks is pulling the index. Just being positive doesn' tmean much.
YTD
Equal-weighted: +5%
Actual SP500 +15%
The vast majority of folks (including myself) have their money in a cap weighted fund, so unless you are one of those niche investors who have all your money in an equal weight S&P500 fund this seems like a non issue. The index is cap weighted and it's always been cap weighted which means it's gains and losses have always been driven primarily by the largest cap companies in the index. It's a feature, not a bug.
This post was edited 2 minutes after it was posted.
this isn't really fair....equal-weight vs market cap sp500 shows a very large discrepancy that shows that a very small number of stocks is pulling the index. Just being positive doesn' tmean much.
YTD
Equal-weighted: +5%
Actual SP500 +15%
The vast majority of folks (including myself) have their money in a cap weighted fund, so unless you are one of those niche investors who have all your money in an equal weight S&P500 fund this seems like a non issue. The index is cap weighted and it's always been cap weighted which means it gains and losses have always been driven primarily by the largest cap companies in the index. It's a feature, not a bug.
it's a spectrum. You are essentially correct but there are still gradients inside that truth.
Now is one of the most extreme situations where just 7 or so stocks have provided the lion's share of returns in the SP500. Extremes like this are worth noting.
And anyway, the SP500 is an index that follows just big cap US. It's not a diversified index. I'd guess indices that follow the other thousands of US stocks not megacap are lagging well behind, with half the return or less. And we should own those indices since we should have diversified portfolios.
That said, agreed that one reason market cap indexing works is that it owns the big massively profitable companies that historically drive the indices. It's all on a spectrum.