In Case You Missed It: Key Charts for the Week:

By Mark Masterson on January 3, 2025

It has been said “a picture is worth a thousand words.”

One legend who seems perfectly content to head into 2025 cautiously is Warren Buffett.

Warren Buffett’s Berkshire Hathaway has a cash position of $325 Billion, or 30% of its total AUM, which is Buffett’s largest allocation to cash since in 35 years

CNBC 12 23 24

I showed last week how the top 10 stocks are now 40% of the S&P 500 index.

Those 10 stocks also contributed over half of the returns this year of the index.

How about the below stat….

• The 3 largest companies in the S&P 500 (Apple, Microsoft, & Nvidia) now make up over 20% of the index, a record high.

Charlie Bilello 12 28 24

I keep seeing stats like this and marvel at the level of concentrated performance…..

Just 10 stocks account for 59% of the S&P 500’s gains since the October 2022 bottom

Bloomberg 12 30 24

Interesting to see the largest percentage of Americans expecting higher stock prices in history….and by a wide margin

Bloomberg 12 30 24

I’m not wasting much time on predictions this year.

Wall Street is predictable – and always says the same thing – namely look for a 10% rise for the market next year.

This year it’s a range from 7-19%.  Ok – thanks.

Here you go….

Phil Rosen 12 31 24

Internals for the market are quite weak.

The monthly market breadth is on pace to hit an all-time low in December.

This essentially shows the percentage of stocks outperforming the index. 

It’s never been this low – which means the market is very narrow.

Factset/BofA 12 31 24

In 2024 it was the US versus everyone else…..

US Stocks (+25.0%) outperformed International Stocks (+5.3%) by nearly 20% in 2024, the biggest outperformance we’ve seen since 1997.

But bonds did not do so well….again.

The US bond market gained just 1% in 2024 and is down 2% over the past 5 years, the worst 5-year performance for bonds in history.

Charlie Bilello 12 31 24

But – take a look at Bitcoin in 2024……

The most important currency in the world looks overbought according to Bank of America….

In face, U.S. Dollar is now the most overvalued in history according to Bank of America

I’ll look at this in the commentary – but a weaker dollar could help a few asset classes.

Bank of America/ Barchart 12 31 24

President Trump posted this last night on his X page….

• “The Tariffs, and Tariffs alone, created this vast wealth for our Country. Then we switched over to Income Tax. We were never so wealthy as during this period. Tariffs will pay off our debt and, MAKE AMERICA WEALTHY AGAIN!”

The comments were in response to another post below that showcased the revenue from tariffs as a percentage of Federal receipts from 1800 – 2023.

• This is a really remarkable chart of tariffs as % of total federal revenue.
• The Second Industrial Revolution, perhaps the most fertile era for technology development and deployment in human history, was 1870-1914.
• Marc Anddreessen 12 30 24

Santa did not come to town…..  The S&P 500 $SPX suffered its largest drop from Christmas to Year-End since AT LEAST 1952

Barchart/Bloomberg 1 3 24

Growth outperformed value by a large margin again in 2024.

At some point, this reverses – like it did in 2022 when the market fell hard.  The value names were protection from the decline that year. 

However, its been almost all growth names (think Mag 7) since 2017.

The US Bond Market has now been in a drawdown for 53 months, by far the longest in history.

Not sure what to make of this, but it does seem notable.

• The delinquency rate on commercial mortgage-backed securities (CMBS) for offices jumped to a RECORD 11.0% in December.
• Delinquency rates on these loans is now up 9.4 percentage points over the last 2 years
• This puts delinquency rates above the 10.7% peak seen in December 2012.
• Furthermore, delinquency rates on these loans are rising twice as fast as during the 2008 Financial Crisis.
• Overall, there were more than $2 billion in office loans that became newly delinquent in December 2024.

Which banks are the most exposed to this?

Kobeissi Letter/ Wolfstreet.com 1 3 24