1. Money Supply and Inflation
Jack Ablin
Huge Increase in Money Supply But 5 Year CPI Hooking Down

Jack Ablin
Huge Increase in Money Supply But 5 Year CPI Hooking Down
Dave Lutz Jones Trading
“The Nasdaq Composite is poised to close at a record, while the S&P 500 is poised to close about 7% below its own record – That’s the largest spread between SPX and its own high w/ the Nasdaq Comp at a record since Feb. 2000. Before that, Jan. 1980″ – Callie Cox
Future expectations are already in the price
Investors should remember that any expectations about the future operational performance of a firm are already reflected in its current price. While positive developments for the company that exceed current expectations may lead to further appreciation of its stock price, those unexpected changes are not predictable.
To this point, charting the performance of stocks following the year they joined the list of the ten largest firms shows decidedly less stratospheric results. On average, these stocks outperformed the market by an annualised 0.7% in the subsequent three-year period. Over five- and ten-year periods, these stocks underperformed the market on average.
SHOULD A TOP-HEAVY STOCK MARKET WORRY US?
Continue readingWith Technology rallying and once again outperforming to start the new trading week, we wanted to note that the sector’s weighting in the S&P 500 has pushed above 27% recently up to 27.2%. That’s nearly twice as big as the next biggest sector in the S&P — Health Care — at 14.5%. Just three other sectors have weightings above 10%, and they’re all just only slightly above the 10% mark — Communication Services, Consumer Discretionary, and Financials. We’d note that Amazon (AMZN) makes up about a quarter of the Consumer Discretionary sector’s 10.8% weighting in the S&P, and while it is technically a retailer, between its web services division, and strong technology platform, you could argue that its just as much a Technology stock as it is Consumer Discretionary.
Industrials and Consumer Staples have seen their weightings dip below 8%, and the four smallest sectors each have weightings of just 2-3%.
At the moment, Tech’s 27.2% weighting in the S&P is larger than the weightings of the six smallest sectors combined.
U.S. savings rate hits record 33% as coronavirus causes Americans to stockpile cash, curb spending
Maggie Fitzgerald@mkmfitzgerald
Key Points