Tuesday, July 21, 2015

7/21/15 Somebody is pushing up those 3% of stocks for a purpose

From the Wall Street Journal Money Beat blog:

 For one thing, only a few stocks are driving the gains. Of the S&P 500′s 3.5% year-to-day gain, virtually all of it has come from the top 15 stocks in the index, ranked by market-weight, according to data from Howard Silverblatt, the senior index analyst at S&P Dow Jones Indices.

Apple Inc., for instance, accounted for 12.5 points of the index’s 72-point gain this year, and Amazon.com Inc. accounted for 7.5 points. Google Inc. (both classes of stock), Walt Disney Co., Facebook Inc., Gilead Sciences, Netflix Inc., J.P. Morgan Chase & Co., and Pfizer are also driving the gains.

Me:  I think hedge funds and banks are pushing these few stocks higher to elevate the indexes while offloading their other 97% of stocks to the poor sucker 401K people who are not allowed to own individual stocks.  Maybe an employee wants to own Apple Computer but he has to buy all the rest in his mutual funds and ETFs.  You know, in order to protect employees, really protect employers from liability law suits, the government deems an employee must diversify.

I know banks are not allowed to own stocks but they are allowed to hold inventory for various purposes.

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