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The S&P 500 Rises to a Record Close, but it Isn’t What you Think
What’s inside and why does it matter?
We’re at a record high, according to all the indices that spam our computers, phones, and TVs. The S&P closed at 3,389.78 on August 18, 2020. We’re in the middle of an ongoing COVID-19 pandemic in the United States. The pandemic has hit the globe asymmetrically, and it his hit the United States harder than other parts of the world.
As of writing this, 175,617 Americans have died from COVID-19. About 500 to 1,000 Americans die each day, and anywhere from 50,000 to 100,000 new cases spring up alongside those deaths.
Yet, America’s largest companies have grown vastly larger on the other side of this catastrophe.
Starting with tech.
The top 5 companies in the Nasdaq-100 are Apple, Amazon, Microsoft, Facebook, and Alphabet (Google). The weights they carry in that index in order: 13.6%, 11.2%, 10.89%, 4.28%, and 7.2%. They are 47.2% of the performance of the index.
The other 95 companies make up the remaining 52.8%.
These companies also exist in the S&P 500. Their weights in that index in order: 6.7%, 5.7%, 4.95%, 2.25%, and 3.3%. They make up 22.9% of the performance of the S&P 500.
