The S&P 500 vs. the U.S. Financial system Defend Cyber

Listed here are some information and figures concerning the S&P 500:

  • Based on World Monetary Information, the S&P solely contained 90 shares when it was created in 1928.
  • It grew to become the S&P 500 in 1957. On the time, the index was comprised of 425 industrial shares, 60 utilities and 15 railroads.
  • Financials and transportation shares weren’t added till 1976.
  • Within the late-Eighties, the index was lastly revamped to account for the extra trendy U.S. economic system.
  • Right this moment, the market cap of the S&P 500 is quickly approaching $50 trillion.
  • The highest 10 shares alone are value practically $17 trillion or greater than 35% of the entire.
  • The highest 25 shares account for 48% of the market cap.
  • Six shares are value greater than $1 trillion: Microsoft, Apple, Nvidia, Google, Amazon, and Fb (these six corporations are 29% of the index).
  • The tech sector makes up roughly one-third of the index however is probably going larger than that when you think about the businesses included within the Communication Providers (Google, Fb and Netflix) and Shopper Discretionary (Amazon) sectors.
  • The S&P now makes up practically 40% of world fairness market share (it was extra like 20% heading into the 2008 monetary disaster).

The S&P 500 is an enormous a part of the U.S. economic system however there are many variations between the inventory market and the economic system.

As an illustration, the expertise sector has an outsized affect on S&P 500 earnings development over time:

Relying on the time-frame, the tech sector could make up the vast majority of each earnings good points and losses. The identical is true of gross sales:

The BEA estimates tech’s contribution to GDP to be 10%.1 That’s nonetheless near $3 trillion however the economic system is way extra diversified and unfold out than the inventory market.

A good chunk of gross sales for S&P 500 corporations additionally comes from exterior our borders:

The S&P 500 is a U.S. index however it’s comprised of world companies.

Apollo’s Torsten Slok has some glorious charts that spotlight the variations between the inventory market and the economic system.

S&P 500 corporations are monumental however the majority of companies with $100 million or extra in gross sales are personal corporations:

Many of the job openings come from smaller, privately-owned companies as nicely:

S&P 500 corporations account for roughly 1 in 5 jobs in the USA:

However these companies are insanely environment friendly and worthwhile, accounting for half of the income in America:

Generally the inventory market follows the economic system. Generally the market front-runs the economic system. Generally the market rises or falls even when the economic system doesn’t.

Should you ever end up pondering that the inventory market doesn’t make a number of sense that’s as a result of generally it marches to the beat of its personal drummer. At instances that drummer is a raging lunatic.

The inventory market and the economic system want one another however they’re completely different animals.

Michael and I talked concerning the S&P 500 vs. the economic system and far more on this week’s Animal Spirits video:

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Additional Studying:
What’s Driving Inventory Market Returns?

Now right here’s what I’ve been studying these days:


1You could possibly in all probability quibble with this quantity since tech is now so ingrained in the whole lot we do.

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