1.Chart of the Century

AEIdeas Mark J. Perry@Mark_J_Perry

CARPE DIEM

July 12, 2019

Found at https://www.morningbrew.com/

1.Bespoke’s S&P 500 Sector Weightings—

Energy 2019 Less Than 5%

Fri, Sep 20, 2019

S&P 500 sector weightings are important to monitor.  Over the years when weightings have gotten extremely lopsided for one or two sectors, it hasn’t ended well.  Below is a table showing S&P 500 sector weightings from the mid-1990s through 2016.  In the early 1990s before the Dot Com bubble, the US economy was much more evenly weighted between manufacturing sectors and service sectors.  Sector weightings were bunched together between 6% and 14% across the board.  In 1990, Tech was tied for the smallest sector of the market at 6.3%, while Industrials was the largest at 14.7%.  The spread between the largest and smallest sectors back then was just over 8 percentage points.

The Dot Com bubble completely blew up the balanced economy, and looking back you can clearly see how lopsided things had become.  Once the Tech bubble burst, it was the Financial sector that began its charge towards dominance.  The Financial sector’s sole purpose is to service the economy, so in our view you never want to see the Financial sector make up the largest portion of the economy.  That was the case from 2002 to 2007, though, and we all know how that ended.

Unfortunately we’ve begun to see sector weightings get extremely out of whack once again.

https://www.bespokepremium.com/interactive/posts/think-big-blog/bespokes-sp-500-sector-weightings-report-september-2019

1.Oil’s Economic Impact Waning.

Barrons

Is the market too complacent about the risk of higher oil prices?

After all, rising prices can limit consumers’ ability to spend on everything other than gasoline, natural gas, and heating fuel. All those products become more expensive as oil prices rise. That can be bad for the economy.

Rising oil prices can also increase headline inflation numbers. And higher inflation makes it harder for the Federal Reserve to cut interest rates to keep the economy chugging ahead. That also sounds bad.

Still, crude’s impact on the economy is far less than it used to be.

Why Oil Prices Don’t Matter for Stocks Anymore-By Al Root

https://www.barrons.com/articles/oil-prices-economic-impact-stocks-dow-jones-industrial-average-saudi-attack-51568744953?mod=hp_BRIEFLIST_1&mod=article_inline

1.Equities Peak Months Before Recession

Capital Group

Investing ahead of a recession: 5 mistakes to avoid

https://www.thecapitalideas.com/articles/investing-ahead-recession-5-mistakes

1.Hedge Funds Record Low Exposure to Small Cap Value.

Twits note how much funds hate value

From Dave Lutz at Jones Trading.