The weight of the top 10 stocks in the S&P 500 is ~33%, the largest ever (yellow line).
The market cap of the largest stocks relative to the 75th percentile is more than 700x and also at records which are only comparable to the early 1930s'
Source: Bloomberg pic.twitter.com/oUe3pe9tMH
— Global Markets Investor (@GlobalMktObserv) March 26, 2024
The stock market rollercoaster just hit another wild loop, and it’s sending shivers down investors’ spines. Let’s break it down: the top 10 stocks in the S&P 500 now carry more weight than ever before, comprising a whopping 33% of the index’s value. That’s right, the big guns are calling the shots like never before.
And if that’s not enough to make you clutch your pearls, consider this: the market cap of these giants compared to the rest of the pack is a staggering 700 times higher than the 75th percentile. We’re talking record-breaking numbers reminiscent of the tumultuous times of the early 1930s.
But wait, there’s more. Brace yourselves for a jaw-dropping revelation: US households are going all-in on stocks, allocating a whopping 48% of their financial assets to the market, according to the financial wizards at Goldman Sachs. And guess what’s leading the charge? Tech stocks, soaring to dizzying heights never seen before, even surpassing the heady days of the Dot-com bubble.
But here’s where things take a dramatic turn. While retail investors are diving headfirst into the frenzy, corporate insiders are hitting the eject button at lightning speed. The ratio of insider selling to buying has skyrocketed to levels not seen since Q1 2021, painting a stark picture of insiders cashing out while the getting’s good.
And speaking of cashing out, Amazon’s top brass is leading the charge, with founder Jeff Bezos offloading a cool 50 million shares worth a jaw-dropping $8.5 billion in February alone. Not to be outdone, Amazon’s CEO Andy Jassy joined the party, selling a tidy sum of $21.1 million worth of shares.
So what’s the takeaway from all this? Well, as seasoned investor Dave Collum puts it, when the Fed starts cutting rates, it might be time to hit the brakes instead of hitting the buy button.
US households are currently allocating 48% of their financial assets to stocks, per Goldman Sachs, $GS: pic.twitter.com/OYeChsUEyp
— unusual_whales (@unusual_whales) March 26, 2024
The ratio of corporate insider selling to buying reached the highest level since Q1 2021, according to Verity.
Among the largest sellers are Amazon founder Jeff Bezos who sold 50mm shares of $AMZN worth $8.5B in February and Andy Jassy, Amazon’s chief executive, who sold $21.1mm pic.twitter.com/bDYZAqAaUG
— Global Markets Investor (@GlobalMktObserv) March 26, 2024
For those who remember, what was the most hilarious nonsense during the 1999 bubble?
Chart @KoyfinCharts pic.twitter.com/UC9oIQaTJL
— Michael A. Arouet (@MichaelAArouet) March 26, 2024
Tech Stocks are trading at all-time highs relative to the S&P 500, even surpassing the peak of the Dot Com bubble pic.twitter.com/WdWEsJcxNB
— Win Smart, CFA (@WinfieldSmart) March 24, 2024
When the Fed starts cutting rates, you should run rather than buy the markets. The cuts mean the Fed smells a problem. The luge run means the Fed can't control the markets…t.co/Yqz30d5d4p
— Dave Collum (@DavidBCollum) March 26, 2024