‘Unstoppable’ S&P 500 Index Added $13 Trillion in Market Cap Amid Geopolitical Uncertainty

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As a seasoned crypto investor with over two decades of experience in the financial markets, I’ve witnessed numerous market cycles and crashes, from the dot-com bubble to the Global Financial Crisis. The current surge in the S&P 500 is indeed impressive, but it raises a few red flags for me.

This year, the S&P 500, a key stock market indicator, has delivered exceptional growth, currently surging by more than 21.5% from the start of the year. Over the past year, this increase has grown even larger, reaching over 33.3%. As a result, its total market value has risen significantly by approximately $13 trillion since October 2023.

According to Kobeissi Letter on social media platform X, previously called Twitter, the impressive rise of the S&P 500 this year is extraordinary and outperforms the index’s performance in most other years throughout history.

NEWS FLASH: The S&P 500 has reached an all-time peak, increasing by a substantial 21.6% so far this year.

Beginning from October 2023, the S&P 500’s market capitalization has grown beyond $13 TRILLION, which is simply astounding.

— The Kobeissi Letter (@KobeissiLetter) October 9, 2024

Previously, the outlet noted that the index experienced its “most significant increase since 1997” despite escalating geopolitical conflicts and mounting worries about a possible financial disaster.

According to the Kobeissi Letter, the S&P 500 has almost doubled the 11.7% growth it experienced the previous year, making it one of its third-strongest performances since 1990. Additionally, it has set a record for the most impressive start to a presidential election year in history.

This week’s events have led to the index reaching its 43rd record high this year, which is the strongest streak since 70 new records were set in 2021. Since last October, when it experienced a low during an ongoing correction, it has risen by 40%.

This finding from the economics publication suggests an overwhelming momentum in the market, as it continues to surge. Simultaneously, investors are showing a growing interest in secure investments such as gold, with exchange-traded funds (ETFs) dedicated to gold and its mining companies experiencing approximately $3.3 billion in inflows since August.

According to recent reports, a metric preferred by investing legend Warren Buffett has reached an unprecedented peak, surpassing its values during both the dot-com bubble and the Global Financial Crisis.

Currently, the Buffett Ratio – which compares a nation’s total stock market value to its GDP – is approaching double the traditional norm (200%) and has been on an upward trend since June of this year. Normally, this ratio hovers around 70%, but it has gradually moved towards 100% in more recent times.

It’s important to remember that although the present value looks significantly high, it’s worth noting that the Buffett Indicator isn’t infallible when it comes to predicting recessions. It has been correct in foreseeing economic slumps only about half of the times.

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2024-10-10 07:26