Jurrien Timmer, Director of Global Macro, provides his weekly market commentary and global macro update. Since the lows in March, we have seen some variation in market leadership. FAANGs have been leading, with power to move the market, but the rally off the lows has actually been quite broad. Jurrien and his team made a deep dive into the top 50 companies in the S&P 500 Index, as opposed to the bottom 450, to profile market leadership from the early and mid-1970s to the late 1990s. There was a massive speculative retail bubble toward the end of the secular bull market of the late 1960s. After that bubble burst, the market was dominated by institutions. The desire to buy companies with “bulletproof” earnings led to the “Nifty Fifty.” Eventually these were destroyed by inflation, and in the late 1990s, the market gave way to a big rotation. Jurrien notes that it is interesting to see what the top 25 names were for each period. Essentially, they were the FAANGs of their times: IBM, AT&T and Exxon in 1972; General Electric, Cisco and Intel in 2000; Apple and Microsoft in 2020. Follow Jurrien on LinkedIn or @TimmerFidelity on Twitter for his detailed research reports and charts.
Recorded on August 4, 2020.