SP500 companies’ revenue per worker.
Source: Eugene Ng on X, BofA
Since 1950, the S&P 500 has had an average intra-year drawdown of -13.6% but is still up 11.6% per year annualized.
No Risk, no Reward. Source: Peter Mallouk @PeterMallouk
Shocking stat of the day: The market cap of the SP500’s top 5 stocks is now equal to the size of the bottom 407 stocks.
Apple, $AAPL, Nvidia, $NVDA, Microsoft, $MSFT, Google, $GOOGL, and Amazon, $AMZN are worth now a combined $15.3 trillion. These companies have added $5 TRILLION in market value since the beginning of last year. To put this into perspective, these 5 stocks are worth now nearly as much as China and Hong Kong's stock markets COMBINED. The top 5 companies reflect a record 24% of the entire US stock market cap. Source: Compound, The Kobeissi Letter
Actual S&P 500 earnings growth has exceeded expectations during the last few years.
Will it be the case again this quarter? Source: The Market Ear, Factset
Did powerlines cause the Los Angeles wildfires?
Edison International stock, $EIX, the parent company of Southern CA Edison, is currently crashing. It's now down -30% since the fires began, erasing $10 BILLION of market cap. Could this be the next big bankruptcy? Source: The Kobeissi Letter
Are Insurance stocks set to collapse?
LA wildfires have officially spread over 40,000 acres with INSURANCE LOSSES crossing $20 billion. Since the market closed on Friday, ESTIMATED DAMAGES have TRIPLED to $150 billion. Insurance, power company, and other corporate bankruptcies could emerge from this. As seen with the PG&E bankruptcy in 2019 after the Camp Fire disaster, these events can create economic ripple effects. E.g many bonds will be downgraded to "Junk" rating in the near future. Could LA wildfires cause an economic ripple effect? Source: The Kobeissi Letter
Europeans own much less stocks than those in the US
Source: GD, Mike Zaccardi, CFA, CMT, MBA
BREAKING: The difference between the S&P 500’s earnings yield and BBB-rated corporate bond yield has dropped to -1.9%, the lowest in 15 years.
Excluding a brief period in 2009, this is the lowest level in 23 years. The gap has fallen by 4 percentage points over the last 5 years as US interest rates have risen sharply. In other words, less risky investment-grade corporate bonds now pay a higher yield than S&P 500 companies' profits relative to their stock prices. This metric suggests the market may be overvalued. Can this gap continue to widen? Source: Bloomberg, The Kobeissi Letter
