The S&P 500 (^GSPC) marks its fourth bull market anniversary, sitting 120% above its October 12, 2022 bear market closing low of 3,577, driven by gains in media, Micron, and top tech names.
Despite the headline rally, approximately 84% of S&P 500 stocks are currently trading at least 10% below their all-time highs, according to new analysis from the Koeasse Letter.
The real estate sector leads that pullback, with 90.7% of its stocks down at least 10%, followed by materials at 96%, utilities at 94%, and consumer discretionary at 92%.
Even more striking, 59% of S&P 500 stocks are down at least 20% from their highs, 41% are down more than 30%, and 17% are off by more than 50%.
Investors have poured cash into money market funds at the fastest pace since the COVID-19 pandemic, according to new data from BofA strategist Michael Hartnett, with that capital set to remain sidelined until the Federal Reserve delivers meaningful interest rate cuts.
Bank earnings season is now underway, with JPMorgan, Goldman Sachs, and other major financial institutions reporting, though many of these stocks entered the week already deep in correction territory after pulling back significantly from their highs.
Deal activity is expected to slow quarter over quarter for the big banks, with closely watched IPOs including those from Anthropic and OpenAI having been pushed further into the future, raising concern about what bank executives may signal on upcoming earnings calls.
Evercore ISI strategist Julian Emanuel has flagged chatter that large banks could face disruption from technology companies including Robinhood and Coinbase, adding another layer of pressure to an already challenged sector.
On the consumer front, household debt has topped a staggering $18 trillion, personal savings rates have fallen below their long-term average, and inflation-adjusted wages remain weak, according to new data from Goldman Sachs.
PepsiCo (NASDAQ: PEP) CEO Ramon LaGuarta delivered a blunt assessment on his company’s earnings call, warning “we don’t expect the consumer to suddenly become much more, you know, in a much better place in the next 12 to 18 months.”
Consumer sentiment fell to 46.3 in October, down 1.8 points from September’s reading of 48.1, representing a five-month low according to the University of Michigan, adding further evidence of pressure on American households.
For Meta Platforms (NASDAQ: META), Yahoo Finance Executive Editor Brian Sozzi identified tracking data on Meta AI, known as Muse, as the single most important metric investors should monitor heading into the company’s next earnings report.
Muse download numbers have been strong since the product’s September unveiling, but the platform has struggled to retain users at the same pace as ChatGPT, though it is outperforming both Grok and Google Maps in retention metrics.
Sozzi explained the investment logic clearly: if Muse performs well, Meta can justify hundreds of billions of dollars in capital expenditure spending over the next three to five years, but weak performance will prompt Wall Street to demand Zuckerberg pull back on spending to protect margins and cash flow.
Separately, Ring CEO Jamie Siminoff sat down with Sozzi to discuss the company’s new smart lock, its first since Ring’s founding, which carries a $249 price tag and features a mechanical dial that uses a supercapacitor to generate enough emergency power to unlock the door when the battery runs out.
Siminoff credited artificial intelligence with dramatically accelerating the product’s development, saying “every person on the planet has access to that same technology, that same amount of experts that I sort of use to build this, which is why I love it.”
Apple (NASDAQ: AAPL) is expected to enter the smart home hardware space with its own smart lock this week, intensifying competition in a market that analysts project could grow to $1 trillion by 2035.
Siminoff compared consumer reluctance around smart locks to early electric vehicle range anxiety, expressing confidence that Ring’s new keyless lock could help unlock broader adoption across the smart home market.
