The S&P 500 Revisits the ’90s, How Last 3 Bull Markets Compare, and a Look at Inflation

The S&P 500 hit 22 new all-time closing highs in 2019 and just continued its record setting into 2020; the top five public U.S. companies now hold a record 18% of the benchmark’s total market cap—higher even than during the tech bubble—but net income is failing to keep up. The dawn of a new decade often brings nostalgia, but do we really want to be revisiting the late 90’s (with the dot-com bust and ’00-’02 recession hot on its heels)? Investors interest in tech certainly hasn’t gone away over the years; can you guess which four companies accounted for ~20% of the index’s 2019 total return? And could continued strong performance (perhaps sparked by yesterday’s surprisingly strong start to earnings season) push us into a final blowoff? Finally, yesterday’s CPI report was roughly in-line with expectations and shows stable inflation, but it has us wondering two things: 1) does the emerging trendline indicate additional increases are in store, and 2) will the data lead the Fed to leave interest rates unchanged through 2021?