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

• Reminder: Upgrade your subscription to unlock the full length weekly newsletter which includes: my portfolio updates, more market commentary and Weekly Q&A’s below

• 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.

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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:

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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