In an unprecedented trend, 72% of S&P 500 stocks underperform the index in 2023—the highest since 1980. Notably, the Magnificent 7 outpace the S&P 493 by 20 times. The top 10 stocks now dominate 35% of the index, a rarity since 1947. With savings contracting and economic warning signs, a high-interest rate and debt environment pose challenges. US Household equity exposure crossing 60% historically precedes stagnant S&P returns, raising concerns about a potential repeat in 2023.
This has ONLY happened 3 times since 1947
Savings as a % of gross national income is now contracting
The last 2 contractions coincided with the:
2008 Financial Crisis
2020 PandemicHigh interest rate + high debt environment is a strong headwind for the consumer
At this rate,… pic.twitter.com/XJoyGLFi2r
— Game of Trades (@GameofTrades_) December 27, 2023
Every generation has its own bubble, human nature doesn’t change, only the bubbles change pic.twitter.com/X757AYKecV
— Michael A. Arouet (@MichaelAArouet) December 27, 2023
72% of the stocks in the S&P 500 have underperformed the index this year.
This is the highest percentage of S&P 500 components underperforming the index since 1980.
Even at the peak of the Dot-com bubble, this metric did not break above 70%.
This comes as the Magnificent 7 are… pic.twitter.com/Xx5TT47t6V
— The Kobeissi Letter (@KobeissiLetter) December 27, 2023
Median Home 🏠 Prices 📉
ht got pic.twitter.com/QwhZLsfeJp
— Win Smart, CFA (@WinfieldSmart) December 27, 2023
SPDR S&P 500 $SPY sees monthly inflows of $40 billion, the highest amount in history. Not even close, wow 👀 pic.twitter.com/3NmgHNgYEC
— Barchart (@Barchart) December 27, 2023
A Lost Decade? 🚨🚨🚨
Interestingly, whenever the US Household equity exposure as % of total liquid assets crosses 60%, the S&P 500 witnesses a lengthy period of no returns.
We had this important threshold crossing in 2020/21. And the S&P has already been a non-performer in… pic.twitter.com/GIIITLVr4n
— Wall Street Silver (@WallStreetSilv) December 27, 2023