Below are some of the most interesting articles, quotes 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.
The dispersion within the broad stock market recently hit a record extreme.
'At 30% of the S&P 500's market cap — but only about 20% of the anticipated earnings — the tech sector's weight is now roughly eight times that of energy, an even wider gap than at the height of the tech bubble 24 years ago.' https://t.co/n8CJTGXycW pic.twitter.com/k9MGe2Q3Bz
— Jesse Felder (@jessefelder) February 13, 2024
However, hyper-concentration at the top like this is normally only associated with periods of ultra-low interest rates.
'High S&P 500 concentration typically occurs during periods of lower Treasury yields and vice versa.' https://t.co/tGsUCfmI4A via @SoberLook pic.twitter.com/QWC5efBfeg
— Jesse Felder (@jessefelder) February 14, 2024
If inflation remains a problem, it’s unlikely that interest rates will fall to levels that justify current extremes.
'In short, inflation is a long way from being beaten.' https://t.co/ZmCJL4qnNY by @inflation_guy pic.twitter.com/PLZAwXj6ET
— Jesse Felder (@jessefelder) February 13, 2024
Perhaps this is one reason some investors are focused squarely at those opportunities at the bottom.
'Warren Buffett's Berkshire Hathaway trimmed its flagship position in Apple in the fourth quarter. Berkshire also reduced its position in HP, while adding to its stakes in Chevron and Occidental Petroleum.' https://t.co/Hahv5foR4G
— Jesse Felder (@jessefelder) February 14, 2024
