As a seasoned crypto investor with over a decade of experience in the stock market and a keen eye for economic trends, I must admit that this year has been nothing short of extraordinary. The S&P 500 adding $8 trillion to its market capitalization is a testament to the unprecedented monetary policies being implemented by central banks worldwide.
This year, the S&P 500’s overall value, or market cap, has increased by approximately $8 trillion due to a rise of over 20%. This translates to an average gain of about $43 billion per business day since the beginning of the year.
As reported by the economic newsletter Kobeissi Letter on social media platform X (previously known as Twitter), the S&P 500 index experienced a significant growth of over $8 trillion in market value during a surge in equity prices, causing apprehension among some investors due to these price increases.
NEWS FLASH: As of today, the total value of companies in the S&P 500 has reached a staggering $8 TRILLION increase since the beginning of the year.
— The Kobeissi Letter (@KobeissiLetter) September 26, 2024
Currently, the S&P 500 is experiencing a significant rise. At the same time, Bitcoin has maintained its value above $64,000, and the price of gold has hit an unprecedented high of over $2,660 per ounce following a surge of more than 30% this year. This exceptional performance marks gold’s best year-to-date increase in this century, coinciding with the U.S. M2 money supply reaching a record high.
It seems these price increases are associated with less restrictive monetary policies from central banks, which caused the M2 money supply to significantly grow. As of September 25, the total assets held by the top 15 global central banks reached over $31 trillion – a level not seen since April. This increase in assets has been ongoing for several months.
Since February, the M2 money supply – encompassing cash in circulation, savings accounts, time deposits, and money market funds – has consistently increased each month, reaching a current total of approximately $21.2 trillion as reported by Trading Economics.
This week, the stock market has continued to rise due to a positive update about the second quarter’s GDP growth from the U.S. government, which exceeded Wall Street projections. Additionally, the number of weekly unemployment claims reached its lowest point in four months.
In the meantime, China is taking steps to rejuvenate its sluggish economy by promising increased public spending and interventions in the stock market, all while attempting to address its persistent real estate issues.
Beyond these developments, the Federal Reserve’s decision to lower interest rates by 0.5 percentage points this month was generally viewed as a beneficial action by market participants. Moreover, it appears that investors anticipate an additional 0.5 percentage point rate cut during the central bank’s November meeting with a probability of approximately 57%, as suggested by the CME FedWatch tool.
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2024-09-27 05:56