Englund

 The S&P 500 SPX is up more than 7% so far in 2023, after last year’s 19.4% slide.  The top 10 stocks hold a 29% weight in the index, and are responsible for around 70% of year-to-date performance Concentrated leadership is far from unusual. In fact, it’s hard to avoid in an index that’s weighted according to market capitalization  MarketWatch 12 May 2023 https://www.marketwatch.com/story/the-s-p-500-is-top-heavy-with-tech-heres-what-that-says-about-future-stock-market-returns-5b7b2e47  It is important to remember the difference between capitalization-weighted indices such as the S&P 500 Index (SPX) and price-weighted indices like the Dow Jones Industrial Average (DJIA).  While a cap-weighted index derives its performance from the movement of the underlying holdings multiplied by their respective allocations as determined by market cap,  the Dow Jones Industrial Average is a price-weighted index, which simply means that stocks with the highest share...

 From the beginning of 2023 through Friday, the 10 largest U.S.-traded stocks have accumulated roughly $2.5 trillion in market value.  That’s more than the market-capitalization increase of the entire S&P 500. The list of the 10 biggest stocks includes many technology names that were once members of the “FAANG” or “FAAMG” baskets. Through Friday, the S&P 500 has closed above its 200-day moving average for 34 consecutive sessions. Despite these gains, only 47% of S&P 500 components were trading above their 200-day moving averages — an unusually wide divergence over the past few decades, https://www.marketwatch.com/story/what-does-weak-stock-market-breadth-mean-for-your-portfolio-heres-what-one-wall-street-analyst-found-e519904a FANGs eight companies — Apple Inc., Amazon.com Inc., Alphabet Inc., Meta, Microsoft Corp., Netflix Inc., Nvidia Corp. and Tesla Inc. — have accounted for all the S&P 500’s growth this year.  The other 492 stocks are down slightly htt...

 What if the relative decline of US stocks isn’t temporary? US equities currently make up just under half of global stock market capitalisation, up from about a third in 2010 Equity investors with shoot-for-the-moon hopes don’t typically bother with currencies, but the dollar has the potential to be a big factor here.  Its haven status is a huge support in luring funds from overseas into US stocks and bonds. Between March 2008 and September 2022, the dollar gained 60 per cent against a basket of its peers, climbing even during a financial crisis caused by the US.  Yet this year, it has slid 4 per cent since turmoil first hit US regional banks in March. Jennifer Hughes FT 5 May 2023 https://www.ft.com/content/cea03ae6-2ce3-4059-8b84-902e67b54fb5 Stocks have rarely been this expensive. That doesn’t (necessarily) mean they’re headed for a crash. https://englundmacro.blogspot.com/2022/02/stocks-have-rarely-been-this-expensive.html FANGs eight companies — Apple Inc., Amazon.co...