Business & Markets Update

Markets (finally) took a breather this past week with the S&P 500 trading -0.65%, which puts the index up 0.30% month-to-date halfway through December. There was plenty to process in terms of corporate news flow (see Top Reads below) and economic data, but we find ourselves in a bit of a holding pattern headed into the Dec 18th Fed meeting, despite a 25 basis point cut feeling like a sure thing.

You can expect news flow, along with broader market volumes/participation to drop off a cliff after this week, with Christmas and New Years Day landing on the final 2 Wednesdays of the year.

Market breadth was a recurring talking point last week. Wait- What the heck is market breadth? Market breadth is a way to measure the overall strength or health of the market by looking at the number of stocks advancing vs the number of stocks declining. It provides a sense of how widespread the participation in a move (higher or lower) really is, and whether broader markets are supporting that trend. Friday marked the 10th straight session in which the S&P 500 had negative breadth (meaning more stocks in the index went down than went up).

I’m going to include some relevant December stats below to give a sense of just how concentrated the leadership is on the index level month-to-date, i.e. the top 7 stocks by market cap (think Tesla / Amazon / Google / Meta etc..) are doing SIGNIFICANTLY better than your average S&P stock the last couple weeks. Good for those 7 stocks, bad for overall market breadth.

MTD average S&P stock -2.72%.

S&P 500 = +0.07%

Because average return of top 7 = +7.88%

US households are now as long US stocks as they have ever been, with data going back to the 1940s… another indication of the general sentiment in this current market backdrop. History would suggest a further pullback could be warranted, i.e. when everybody is already long, it’s hard for asset prices to keep appreciating indefinitely.

The Household sector’s stock ownership is now at 39% of financial assets, above the high reached in 2021:

A quick visual reminder on just how lumpy returns can be over time. The stock market goes up over time, but not all the time! Most years look very little like the +10% historical average, and this year is another good example of that (currently +26.9% YTD with 11 trading days left).

The S&P 500 has finished with a total return > 25% in 26 out of 96 years since 1928. That's 27% of the time.

Top Reads

How Security Teams Protect Top Executives (Link)
NFL Enters Private Equity Era With Bills & Dolphins Selling Stakes (Link)
Amazon to donate $1 million to Trump inauguration, matching Meta (Link)
Service Titan Breaks The IPO Drought (Link)
Meta Spends More On Personal Security For Zuckerberg Than Any Other Company (Link)
BuzzFeed sells 'Hot Ones' studio in $82.5 million deal (Link)
Wall Street Is Betting Billions on Rental Homes as Ownership Slips Out of Reach (Link)
SpaceX Valuation Surges to $350 Billion As Company Buys Back Stock (Link)
Trump Advisers Consider Raising SALT Write-Off Limit to $20,000 (Link)

Some Tidbits Inside the Business Of Health & Wellness

Tim Cook on the Past, Present, and Future of Apple (Link)
“…if you zoom out way into the future, and you look back and ask what Apple’s biggest contribution was, it will be in the health area.”
Global Sales Lift Lululemon (Link)
Tonal Preps Strength Studio Pop-Up (Link)
Sollis Health Raises $33m to Transform Emergency Healthcare with Concierge Model (Link)

Full Bezos Interview @ NYT DealBook That’s Worth Your Time

Talking all things Amazon, Blue Origin, broader vision for humanity in space… and way more: (Watch Here)

Home stretch on '24, finish STRONG! TC

From the Desk of Todd Cuccia 12/16