Brief note this week as a lull between Christmas feasting and family time fun presents an opportunity to share what I reckon might be one of the most interesting charts of the year.
The blue line is probably no surprise — US tech stock prices have been powering ahead driven by a mix of hype and fundamentals (earnings).
We probably all know by now how much of the strength in the S&P 500 index has been driven by big tech, but this also carries across to earnings.
On the other hand, non-tech stock earnings have seen almost a 3-year period of stagnation. In real CPI adjusted terms it’s a full-on earnings recession (the below chart is in nominal terms). No wonder ex-tech have been lagging behind. And no wonder tech have been leading the charge.
But I’ll leave you with an open question before I get interrupted by little footsteps scurrying down the stairs — which of the lines in the chart below has the biggest scope to surprise? (up or down)
$.SPX(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $.IXIC(.IXIC)$ $NASDAQ 100(NDX)$ $Invesco QQQ(QQQ)$ $.DJI(.DJI)$ $GLOBAL X DOW 30® COVERED CALL ETF(DJIA)$
Key point: It’s a tale of both boom and bust in US corporate earnings.
Comments