Another day, another record: The top 10 companies in the S&P 500 now account for a record 37% of the index.
This percentage officially exceeds peak levels seen during the 2000 Dot-Com bubble by 10 percentage points. Over the last decade, the market concentration has more than DOUBLED. Furthermore, the top 10 stocks alone now have a market cap of ~$18.7 TRILLION. This means that the top 10 stocks in the US now have a combined market cap that is $1 trillion higher than the entire European stock market. Source: The Kobeissi Letter
Fun fact: This was only the 5th time since 1960 that $SPX returned more than 2.5% while simultaneously breaking into an all-time high.
The last time this happened was March 21st, 2000. Source: Tier1 Alpha
Goldman has some potential reaction functions:
* Trump w/ Republican Sweep = 25% probability; S&P +3% * Trump w/ Divided Government = 30% probability; S&P +1.5% " Harris w/ Democratic Sweep = 5% probability; S&P -3% * Harris w/ Divided Government = 40% probability; S&P -1.5% Source: Carl Quintanilla on X, Goldman Sachs
$SPY Price Action Around Elections
In the last three election cycles, we've seen risk-off behaviour before the vote, followed by a strong rally in the weeks that follow. This year’s pattern is shaping up similarly, will history repeat? Source: TrendSpider @TrendSpider
Markets are pricing a large move on Nov. 6th
Source: Mike Zaccardi, CFA, CMT 🍖@MikeZaccardi
🚨THIS IS ONE OF THE MOST OVERVALUED MARKETS IN HISTORY🚨
S&P 500 is expensive on 19 out of 20 metrics, according to the Bank of America analysis. Some metrics such as Shiller Price to Earnings ratio (CAPE) are over 100% above historical averages Source: Global Markets Investor
⌛ S&P 500 EARNINGS HAVE BEEN DISAPPOINTING⌛
75% of companies beat Wall Street analysts' Q3 earnings expectations, the lowest share since Q4 2022. This is despite huge earnings estimates downgrades that took place in Sep This week will be extremely crucial as 42% firms report. Source. Global Markets Investor, Bloomberg
The last time the S&P 500 rose more than 40% over 12 months was in 1987.
Source: The Great Martis @great_martis
