Market Capitalization of the Largest Stock Relative to the 75th Percentile Stock The U.S. equity market is experiencing historically high levels of concentration, primarily driven by the dominance of a small group of mega-cap tech companies. This concentration is at levels not seen in nearly a century. Image: Goldman Sachs Global Investment Research
S&P 500 Market Capitalization vs. U.S. GDP The wealth creation in the U.S. stock market has significantly outpaced the broader economy, leading to increased sensitivity of consumer spending to equity moves. Image: Bloomberg
Equity Market Concentration – Market Capitalization of 10 Largest Companies as Share of S&P 500 Total Concerns about overconcentration arise as the top 10 stocks in the S&P 500 hold a significantly larger weight in the index than their share of earnings would suggest. Image: Goldman Sachs Global Investment Research
Share of Global Market Capitalization The United States, with 64% control of the global equity market, significantly influences the global financial landscape by attracting investments and shaping market trends, overshadowing all other countries. Image: Goldman Sachs Global Investment Research
Top Five Companies % of S&P 500 Market Capitalization The S&P 500 is experiencing unprecedented levels of concentration. While the concentration presents potential risks, the fundamentals of the top 5 companies remain strong, with elevated profit margins and robust cash flow generation. Image: Deutsche Bank
S&P 500 Buybacks The projected increase in stock buybacks to over $1 trillion in 2025 reflects strong confidence among S&P 500 companies in their financial health and future earnings potential. Image: Deutsche Bank Asset Allocation
Median Stock Short Interest as Share of Market Capitalization While the S&P 500’s median short interest is currently low by historical standards, Consumer Staples, Utilities, and Health Care sectors are notable exceptions, showing elevated short interest compared to their 30-year historical averages. Image: Goldman Sachs Global Investment Research
Median S&P 500 Stock Short Interest as % of Market Capitalization The S&P 500’s median short interest level has increased to 2.0%, the highest since 2020, but remains relatively low, reflecting continued market optimism and limited bearish sentiment. Image: Goldman Sachs Global Investment Research
Market Capitalization of the S&P 493 as Share of Index Total The 493 smallest stocks in the S&P 500 now account for just 67% of the index’s market capitalization, a record low. This reflects a trend where a few large companies dominate, raising concerns about market concentration. Image: Goldman Sachs Global Investment Research
Seven Largest Companies as Share of S&P 500 Total Market Capitalization The seven largest stocks in the S&P 500 index account for 33% of its total market capitalization. While this high concentration doesn’t necessarily predict market downturns, it can potentially lead to increased volatility. Image: Goldman Sachs Global Investment Research
Valuation – Market Capitalization of Stock Market / M2 Money Supply The current high market capitalization of U.S. equities relative to M2 suggests that investors are anticipating very optimistic future earnings and a stable economic outlook. Image: Gavekal, Macrobond