5 charts from the past week that tell an interesting story in markets and investing…
1) New Member of the Fab 5
Tesla’s market cap passed Facebook this week to become the 5th largest company in the US (trailing only Apple, Microsoft, Amazon, and Google). Its market cap now stands at $773 billion, up from $85 one year ago.
A year ago Tesla was trading at 3x sales. Today: 29x.
2) Coming Soon: Higher Inflation?
Inflation expectations in the US continue their vertical ascent, now at 2.09% (5-year breakeven rate).
Bond investors are starting to get the message, with the 10-Year Treasury Yield back above 1% for the first time since last March.
3) Crude, Copper, and Commodities
The Crude Oil comeback continues, with prices moving back above $50/barrel for the first time since last February.
Not to be outdone, Copper is at its highest levels in 8 years.
The CRB Commodity Index is now up over 70% from its lows last April.
4) Dividend Dip
With a 0.1% increase, 2020 was the slowest year for S&P 500 dividend growth since 2009.
Incredibly, if dividends have bottomed, the 9% decline we saw from Q1 to Q3 in 2020 would be smaller than the declines in the previous 3 recessions…
5) Bitcoin Goes Mainstream
Bitcoin crossed above $40,000 this week for the first time, doubling over the past 3 weeks. Everyone is starting to talk about it…
The answer to this poll was settled pretty quickly…
Why the recent surge higher?
There are many “reasons” to choose from, but the prospect of another spike higher in US national debt (via yet another stimulus bill) and the Federal Reserve continuing its record balance sheet expansion (and 0% interest rate policy) remain at the top of the list.
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And that’s it for this week. Thanks for reading.
Have a great weekend everyone!
-Charlie
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