The Tech&P 500

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Happy Friday! In today’s email:

  • The S&P 500 Is Now The Tech&P 500?

  • US Households Have Highest Stock Allocation In History

  • Americans Spend Record Amount On Food In 2023

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  • Stock Market Recap For The Week (Week return as of market open, Friday June 21st)

    • S&P 500 = +0.77%

    • Nasdaq = +0.14%

    • Dow Jones = +1.43%

The Tech&P 500

The S&P 500 index tracks the 500 largest companies in the USA, however with a market weighted index of the S&P 500, just 5 stocks account for 60% of S&P 500 returns YTD: MSFT, NVDA, GOOGL, AMZN, and META. Should we start calling the S&P 500 the Tech&P 500?

Tech companies in the S&P 500 have also seen an outsized EPS growth since 2005. To look at this even more, we can compare a market weighted S&P 500 index ETF (like VOO) to an S&P 500 even weight index ETF (like RSP) with their YTD total returns.

This disparity in price of VOO vs RSP shows how big those large tech companies have played a roll in growing the S&P this year. We also cannot forget about Eli Lilly & Co (LLY), which has helped as well being up 49% YTD.

The 10 largest stocks in the S&P 500 have seen a 17% median return in the past three months while the remaining S&P 500 members have seen a -1.3% median return in the past three months.

I know I have talked a lot about Nvidia these past few weeks, but here is a crazy graph. Nvidia is worth more than the entire stock market of France or the UK.

What is the takeaway? The market weighted index of the S&P 500 is currently seeing a large concentration in the top stocks, while the rest of the S&P is not seeing much growth in 2024 so far. This is something to keep in mind if you are buying an S&P 500 ETF like VOO or SPY, you are holding a large concentration in these top stocks.

Oh Sh*t You’re a Grown Up

Life comes at you fast. Suddenly you’re being quizzed on things like 529 plans and backdoor Roth IRAs. It’s time to step up and be responsible with your money and financial goals. But unlike 2 AM feeds - you don’t have to be in this alone.

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US Households Have Highest Stock Allocation In History

What is the takeaway? Households are owning stocks at a record number. I like to see this. If you have a long time horizon, this is the place to be. However in the short term, remember what Warren Buffett says:

Be fearful when others are greedy and greedy only when others are fearful

Americans Spend Record Amount On Food in 2023

What is the takeaway? Due to the rising cost of food, Americans spent a record ~$17 trillion on food in 2023. This is the most ever recorded in a single year.

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