Sep 10, 2021
Yesterday, we took a look at the makeup of the S&P 500’s largest 25 companies in 2021 and compared it to that of 10 years ago. Today, we will be extending the study to 2001, twenty years ago right before the 9/11 attacks. On the day before 9/11, the sectors with the largest number of components in the top 25 in terms of market cap were Consumer Staples, Health Care, Technology, Financials, and Communication Services. While all of these sectors still hold a spot in the current top 25 list, the makeup has shifted substantially. Energy and Industrials, which each accounted for 8% of the top 25 companies in 2001, now have zero representation in today’s list. Consumer Staples also reduced its count from five to two.
Only seven companies that made up the list of top 25 names in September 2001 remain on the list today. Those seven companies are Microsoft (MSFT), J&J (JNJ), Walmart (WMT), Home Depot (HD), Procter & Gamble (PG), Bank of America (BAC) and Pfizer (PFE). The average increase in market cap of these seven equities, excluding dividends, is 241.88% with a median of 263.84%. While the turnover of this list has been high over the last 20 years, every member of this list is still in operation today, but two have been undergone mergers (Time Warner & Royal Dutch Petroleum). Interestingly enough, the members of this list have approximately the same proportionate makeup of the S&P 500, with only a 1.89% increase in the weightings of the top 25 stocks now relative to September 2001.
The US economy today is far different than it was in 2001. As it has changed, some companies have adapted and experienced massive growth, while others have been left in the dust. Apart from the two companies that are no longer independently publicly traded, the average return of the 25 largest companies from 2001 is 92.94% with a median return of 49.08%. Over that same period, the S&P 500 has returned 310.61%.
Jun 28, 2021
See what’s driving market performance around the world in today’s Morning Lineup. Bespoke’s Morning Lineup is the best way to start your trading day. Read it now by starting a two-week free trial to Bespoke Premium. CLICK HERE to learn more and start your free trial.
“In spite of the cost of living, it’s still popular.” – Kathleen Norris
Good Morning Subscriber,
It’s a quiet start to the new week with US futures mixed, treasury yields modestly lower, and crypto assets rallying. The economic calendar is also pretty quiet today with Dallas Fed Manufacturing the only release on the calendar. We will get some commentary throughout the day from Fed speakers, though, so those have the potential to cause some ripples in the market as they hit the wires. Overnight in Asia, the Chinese central bank said that the economy continues to improve and show signs of stability. In Europe, the trend has been modestly lower with Travel and Leisure stocks experiencing the largest declines while defensive catch a bid.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, an update on bitcoin and crypto technicals, the latest US and international COVID trends including our vaccination trackers, and much more.
Today brings the start of a new trading week but also marks the beginning of the sprint to the finish of Q2. With just three trading days left in the second quarter of 2021, the S&P 500 has already rallied 7.75% in what has been another impressive quarter. With stocks up strongly heading into quarter-end, there’s always a concern that the quarter will close off on a weaker note as portfolio managers look to rotate out of equities in order to get their weightings more in line with their target allocations. While rebalancing like this invariably does occur, long-term performance numbers do not suggest that it has a significant impact on market returns in the final days of the quarter- at least not when the gains are in the high single-digit percentage range and above.
The scatter chart below compares the S&P 500’s QTD returns up until the last three trading days of the quarter (x-axis) and compares that to the S&P 500’s performance in the last three trading days of the quarter. If there was an inverse relationship between QTD performance and returns in the last three trading days, you would expect to see dots higher up towards the left side of the chart and trending lower as you move right. As shown, that type of pattern is minimal at best.
On the right side of the chart, the shaded area represents all quarters where the S&P 500 was up over 5% heading into the last three trading days of the quarter, and we have enlarged that area in the lower chart. While the strongest quarter (Q1 1987) saw the S&P 500 decline 3% in the last three trading days of the quarter, other than that, the dots are scattered all over the place in no meaningful pattern. Of the 305 prior quarters since 1945, the S&P 500’s performance in the final three days of the quarter was a gain of 0.12% with positive returns 58% of the time. In the 113 quarters where the S&P 500 was up at least 5% heading into the final three trading days, though, the S&P 500’s average change to close out the quarter was a gain of 0.005% with positive returns 50.4% of the time. So there is some negative drag, but it’s minimal.
Dec 24, 2020
Our 2021 Bespoke Report market outlook is the most important piece of research that Bespoke publishes each year. We’ve been publishing our annual outlook piece since the formation of Bespoke in 2007, and it gets better every year! In this year’s edition, we’ll be covering every important topic you can think of that will impact financial markets in 2021.
The 2021 Bespoke Report contains sections like Valuation, The Fed, Sector Technicals and Weightings, COVID, Dollar & Stocks, Yield Curve & Fed, Commodities, and more.
We’ll be releasing individual sections of the report to subscribers until the full publication is completed by year-end. Today we have published the “Our View and Introduction” section of the 2021 Bespoke Report, which summarizes our thoughts on the year ahead for financial markets and provides an excellent rundown of the things that mattered most in 2020.
To view this section immediately and all other sections, become a member with our 2021 Annual Outlook Special!
Dec 23, 2020
Our 2021 Bespoke Report market outlook is the most important piece of research that Bespoke publishes each year. We’ve been publishing our annual outlook piece since the formation of Bespoke in 2007, and it gets better every year! In this year’s edition, we’ll be covering every important topic you can think of that will impact financial markets in 2021.
The 2021 Bespoke Report contains sections like Valuation, The Fed, Sector Technicals and Weightings, COVID, Dollar & Stocks, Yield Curve & Fed, Commodities, and more. We’ll also be publishing a list of our favorite stocks and asset classes for 2021 and beyond.
We’ll be releasing individual sections of the report to subscribers until the full publication is completed by year-end. Today we have published the “International Markets” section of the 2021 Bespoke Report, which looks at the performance, fundamentals, market caps, and more of stock markets around the globe. We also review the current and 2021 forecasted interest rate and broader economic environments for several of the world’s largest economies.
To view this section immediately and all other sections, become a member with our 2021 Annual Outlook Special!
