Down goes the Dow

3,300 is in the short term cards. Pre-covid high. Fed and Government wasted all the QE and stimulus, bought the January “fake” market high. Pay back is inflation and falling earnings (collapsing demand and margins). That is really only the beginning. As the year progresses the reality sinks in with even lower prices.

equal weighted SP500 down just 13% this year.

regular sp500 is down 17%.

tech down 26%

this has been a megacap blowup, not an 'average stock' blowup.

whether that's bullish or bearish I don't know. Maybe we're just waiting for the rest of them to be taken out back and shot too.

meanwhile, industrial production is roaring, retail sales are good...the recession is not showing up yet. And to my knowledge earnings ests have not come down.

housing is going to hit a pothole tho. That's not looking good at all.

* So-called equal weight S&P 500 is a gimmick.

* S&P 500 is down 18.20% YTD.

* S&P 600 is down 16.57% YTD. Cannot get more average stock than S&P 600.

SP600 is a small cap index. It is not an 'average stock' index. It doesn't have any large caps. And anyway, with the dividend, it's down 15.3, significantly better than the regular Sp500, which is my point - that once you get awy from the megacaps things are better.

The equal weight Sp500 is what it is. it's not a gimick. You can invest in it with ticker RSP. It's a way to get large cap exposure without the massive influence of Apple, Amazon, google, etc. I own it and have done well with it.

On all returns I include the dividend because it is an integral part of stock market returns. That's the discrepancy between your numbers and mine.

Not with supply still low and demand still at an all time high.

data are already showing slowdowns in homebuilding...builders know what's up.

and come on....these new much higher mortgage rates have to do some serious damage in the frothy markets.

At some point we'll even see $50,000 markdowns on those $1.8 million dollar 3 br ranches in Boulder.

You believe it is proper to use so called equal weight S&P 500 as a measuring stick? Of course equal weight S&P 500 is a gimmick. The largest companies should be reflected with greater weight which is not the case with so-called equal weight S&P 500. I included S&P 600 in my post because if you want to know how smaller companies are doing, look at S&P 600 instead of trying to use a half @ss fund, so called weighted S&P 500 with the weak S&P 500 companies having the greatest influence. If one wants to know how U.S. equities are doing, S&P 1500 is best. S&P 1500 is down 18.03% YTD.

With equal weight S&P 500, I should have stated the weak S&P 500 companies have the greatest relative influence.

there's value in many kinds of indices. The problem with the regular SP500 is that around 20% of it is 5-6 stocks. So you aren't getting an accurate read on what the average big cap is doing. If you want to get a read on how the average big cap is doing, you should look at the unweighted SP500.

There are many measuring sticks. Depends what you are trying to learn. There's no reason 'the largest companies should be reflected with greater weight' if you want to know how the average big cap is doing. Rethink this.

Won't be enough. Slight slow down is probably likely and things will even out but I doubt we'll see much in ways of negative gains. Housing might only return a normal 1-3% this year instead of the like 50% gain over the past two years.

Equal weight S&P 500 is not a gimmick. It was pretty clear the largest market cap companies were having an undue influence on performance. Same thing happened during the Tech Bubble over twenty years ago.

Of course the largest companies should have the most weight. The largest companies may employ over 50000 individuals. The smallest companies in S&P 500 may only employ 1000. Do you try to confuse clients like this?

agree to disagree I suppose. These mortgage rates are massive impediments, the population will not grow anymore, people just lost a carpton of money in the stock and bond market, housing went up a very unnatural 20% in a year...I am not bullish on housing. I mean look at Home depot stock....down 30%. Lowe's the same. Some solid headwinds and indications there.

I agree the regular SP500 is valuable. So is the unweighted.

just sort of weird that you see no value in knowing how the average US large cap stock is doing. I mean that's something I like to know. You would rather not know that I guess. Ok.

Dallas builder: “Interest lists are shrinking or buyers are truly pausing.”

Houston builder: “Many first-time buyers simply no longer qualify with the increase in interest rates, as their debt-to-income ratio gets out of whack.”

San Antonio builder: “Traffic has been cut in half since the hike in rates.”

Raleigh builder: “Investor activity has slowed dramatically.”

Provo builder: “Investors are evaluating the investment more critically than in the past.”

Washington DC builder: “Traffic half what it was in March. Worried about first time buyers. Many fewer REAL buyers than number of people collected on interest list last 6 months. Certainly more attempts [from buyers] to negotiate.”

Seattle builder: “Pause by a large population of buyers. To achieve our desired [sales] pace, we had to make price adjustments. Rates starting to knock people out of qualification.”

I thought somebody (maybe gente?) showed data a few months ago demonstrating little or no connection over time between mortgage rates and property value trends? Maybe I'm misremembering...

In any case, the housing market is something I'm keeping a very close eye on since half of our non-pension net worth is in RE. I'm expecting to see downward price movements in markets of interest to me, but maybe not so much in the specific neighbourhoods where we own, which are downtown in attractive markets, where prices were not frothy in the past two years' COVID bounce, with people fleeing out of urban cores. I think we will see very sharp corrections in many smaller communities though.

Time will tell... I may still retire destitute. :-D

I asked no question. Rather I was interested in the reasoning behind your statement which did not make sense to me.