- Five companies (or equivalently, 1% of all the companies in the S&P500) have been responsible for roughly one third of the stock market’s gains in 2021 and more than half of its gains since last April. Those companies are Microsoft, Nvidia, Apple, Alphabet, and Tesla
- There have been 1,006 initial public offerings this year, which is more than 2x the number seen last year. 60% of these public offerings were done through SPACs. Yet, the sheer volume of IPO’s has not correlated with attractive performance. In fact, these newly traded stocks dropped by 10% on average in the aftermarket and 64% them are still trading below their IPO price.
- Over the past 100 years the US’ GDP has grown roughly 10x as fast as the population, which grew from 106 million people to just over 330 million. During that time period the Dow Jones Industrial Average rose around 9% annually.
- The S&P500 is now 75% more expensive than the UK stock market (FTSE 100 index) based on forward price-earnings multiples. Before the pandemic this premium was only 35%. This relative low valuation may be one reason why private equity firms have invested $300 billion into European companies this year, which beats the previous record of $256 billion back in 2006.
WSJ – Five Big Tech Stocks Are Driving Markets. That Worries Some Investors
Barrons – More Than 1,000 Companies Went Public in 2021, But Returns Are Worst in a Decade
Barrons – Lesson of the Century: The U.S. Economy Is Nothing if Not Resilient
WSJ- Cheap Stocks in Europe Can Reward Investors With a Plan
Economic Calendar
Monday: None scheduled
Tuesday: S&P Case Shiller Home price index (Oct)
Wednesday: Trade in goods, advance report(Nov), Pending home sales index (Nov)
Thursday: Chicago PMI (Dec)
Friday: New Year's holiday
