Below are some of the most interesting articles and charts I came across this week. Click here to subscribe to our free weekly newsletter and get this post delivered to your inbox each Saturday morning.
Not only have markets become increasingly concentrated, so have the portfolios of investors of all ages.
At Vanguard, one-fifth of investors 85 or older have nearly all their money in stocks, up from 16% in 2012.
"The spirit of the times is 'Don't worry about the markets crashing. They will come back up and set new highs.'" –@RobertJShiller https://t.co/7pWRniVbji
— Jesse Felder (@jessefelder) July 5, 2023
Corporate earnings don’t appear to support the case for either.
Earnings contribution of the top ten stocks in $SPY has collapsed while their % of market capitalization has rocketed past all-time highs. Gonna be a great time for stock pickers as this unwinds . . . again. https://t.co/RRU9cH9vfM
— Chris Pavese (@ChrisPavese) July 6, 2023
But that certainly hasn’t held back investor enthusiasm for Big Tech.
Tech Stocks have the highest relative sentiment in 23 years. pic.twitter.com/ofObJpMNmJ
— Macro Charts (@MacroCharts) July 1, 2023
Meanwhile, the message from the yield curve is hardly bullish.
This chart shows 100 years of Chair Powell's preferred US yield curve (10yr-3m rates). Whatever your view about the accuracy of the yield curve as a recession predictor, the curve has only been this inverted three times before – 1929, 1973 and 1979-80. None of those ended well. pic.twitter.com/BKy8y33yV2
— Ian Harnett (@IanRHarnett) July 5, 2023
And if that message is eventually vindicated, there are certain assets, where sentiment is significantly depressed, that may stand to benefit.
'The Gold/Silver ratio is considered most useful at its extremes. Currently the ratio is near 82, which possibly indicates that silver is undervalued relative to gold.' https://t.co/WdfrZ0keoE ht @SoberLook pic.twitter.com/dBBjqIMSVf
— Jesse Felder (@jessefelder) July 6, 2023
