AI-related stocks now account for 49% of the S&P 500’s market capitalization, a level of market concentration exceeded only during the railroad boom. This week’s roundup of the US economy and stock market covers record traffic at the Port of Los Angeles, the drop in Americans who say they drink alcohol, government spending as a share of GDP across OECD countries, September’s inflation report, and how rising stock prices have shifted household wealth.
US Economy
The Port of Los Angeles completed its busiest three-month run on record. Redbook same-store sales growth accelerated to its highest rate since early July. Job postings compiled by Indeed have picked up.
US job openings. Source: The Daily Shot
Alcohol consumption in the US has fallen drastically in recent years.
Share of Americans who drink alcohol. Source: Gallup via Semafor
France tops government spending as a share of GDP among OECD countries, driven by social protection spending of almost a quarter of output, much of it on pensions, while the US ranks near the bottom.
Social protection spending as a share of GDP. Source: Financial Times, OECD
Here’s a look at health and education spending as a percentage of GDP among OECD countries.
Health and education spending as a share of GDP. Source: Financial Times, OECD
Source: @financialtimes Read full article
These are the most popular ice cream flavors by state.
Most popular ice cream flavor by state. Source: Instacart
US Stock Market
Seasonality remains favorable for equities.
The four-year presidential cycle. Source: Carson Research
Source: @ryandetrick via Callum Thomas Read full article
AI-related stocks make up 49% of the S&P 500’s market capitalization, exceeding the concentration reached during every historical bubble except the railroad boom.
Rising equity prices have boosted US household wealth across the wealth distribution since the end of 2024, …
Household wealth by group. Source: Federal Reserve via Reuters
Source: Reuters Read full article
… but only the top 1% gained wealth share.
Share of household wealth by group. Source: Federal Reserve via Reuters
Source: Reuters Read full article
The S&P 500 bull market has reached its fourth anniversary, making it the eighth-longest since World War II. Since 1974, every S&P 500 bull market that reached its fourth anniversary has gone on to complete a fifth year, with the four most recent cases delivering double-digit gains without a correction exceeding 10%.
The S&P 500 has gone over 50 trading days without a 1% decline, and the NYSE has recorded over 220 consecutive sessions without declining stocks accounting for at least 80% of trading volume, the longest such streak since at least 1996.
The Fed
Headline inflation accelerated to 0.65% month over month in September, in line with consensus. However, core inflation rose by 0.33% month over month, hotter than expected. AI-related imports, tariff front-running, shipping disruptions, and a spike in fuel prices have fueled acyclical inflation, according to Bank of America. Gasoline price inflation accelerated amid elevated energy prices and ongoing Middle East tensions. Food inflation, however, eased. Ground beef prices leveled off but stayed above $7 per pound for the sixth consecutive month.
Turning to components of core inflation, core goods prices increased for a third straight month, led by both new and used vehicles.
Prices for computers and peripherals continued to rise amid price hikes for several Apple products. Shelter inflation accelerated last month, with owners’ equivalent rent (OER) contributing 12 basis points to month-over-month core inflation.
Markets increased their bets on Fed tightening following the CPI release, with the implied probability of an October rate hike rising to 34% and approximately 30 basis points of cumulative tightening priced in by year-end.
Mortgage applications edged lower as the 30-year fixed mortgage rate increased.
Great Quotes
“ Success isn’t measured by money or power or social rank. Success is measured by your discipline and inner peace.”
— Mike Ditka
Picture of the Week
Orionids Meteor Shower
The Orionid meteor shower peaks the night of October 21–22.
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