🚨SOMETHING VERY STRANGE IS HAPPENING
The S&P 500 keeps hitting all-time highs.
But look at what’s happening beneath the surface:
US stock market value: $81.6 trillion.
US GDP: $32.6 trillion.
The stock market is already worth roughly 2.5 times what the entire US economy produces in a year.
Something doesn't add up here:
WHY DOES THE STOCK MARKET KEEP RISING WHILE THE ECONOMY WEAKENS?
There is a connection that almost no one notices.
In the S&P 500, a company's weight depends on its market capitalization.
The larger the company, the greater its influence on the index.
That’s why, for every dollar flowing into funds that track the S&P 500, the lion's share ends up in the very companies that already dominate the market.
THE GIANTS KEEP ABSORBING THE BULK OF INCOMING CAPITAL.
Meanwhile:
→ Credit card debt has just hit a record $1.18 trillion.
→ Serious delinquency rates—delays of 90 days or more—have risen to 10.9%. That’s the highest level in 13 years.
→ Delinquencies on high-risk auto loans have surpassed 7.8%, exceeding the peaks seen during the 2008 financial crisis.
→ The household savings rate has plummeted to 3.4%. → U.S. banks have accumulated over $510 billion in unrealized losses.
→ The number of people receiving unemployment benefits continues to rise, while full-time employment gives way to part-time work and side gigs.
And yet, the stock market keeps hitting record highs.
Now, here is the interesting part:
The top 10 companies alone are worth nearly $30 trillion.
A 10% drop in these ten stocks would wipe out about $3 trillion in market value.
That is an amount equivalent to nearly 9% of the annual U.S. GDP.
And that is without any movement from the other 490 companies.
Read that again.
All 500 companies don't need to crash.
IT WOULD ONLY TAKE A DROP IN THE INDEX'S TEN MOST INFLUENTIAL COMPANIES.
That is the real risk that no one is considering.
The S&P 500 keeps hitting all-time highs.
But look at what’s happening beneath the surface:
US stock market value: $81.6 trillion.
US GDP: $32.6 trillion.
The stock market is already worth roughly 2.5 times what the entire US economy produces in a year.
Something doesn't add up here:
WHY DOES THE STOCK MARKET KEEP RISING WHILE THE ECONOMY WEAKENS?
There is a connection that almost no one notices.
In the S&P 500, a company's weight depends on its market capitalization.
The larger the company, the greater its influence on the index.
That’s why, for every dollar flowing into funds that track the S&P 500, the lion's share ends up in the very companies that already dominate the market.
THE GIANTS KEEP ABSORBING THE BULK OF INCOMING CAPITAL.
Meanwhile:
→ Credit card debt has just hit a record $1.18 trillion.
→ Serious delinquency rates—delays of 90 days or more—have risen to 10.9%. That’s the highest level in 13 years.
→ Delinquencies on high-risk auto loans have surpassed 7.8%, exceeding the peaks seen during the 2008 financial crisis.
→ The household savings rate has plummeted to 3.4%. → U.S. banks have accumulated over $510 billion in unrealized losses.
→ The number of people receiving unemployment benefits continues to rise, while full-time employment gives way to part-time work and side gigs.
And yet, the stock market keeps hitting record highs.
Now, here is the interesting part:
The top 10 companies alone are worth nearly $30 trillion.
A 10% drop in these ten stocks would wipe out about $3 trillion in market value.
That is an amount equivalent to nearly 9% of the annual U.S. GDP.
And that is without any movement from the other 490 companies.
Read that again.
All 500 companies don't need to crash.
IT WOULD ONLY TAKE A DROP IN THE INDEX'S TEN MOST INFLUENTIAL COMPANIES.
That is the real risk that no one is considering.