Has anyone spent the time to what the S&P500 is actually constituted of as of today.
First of all, we all know mass un-employment is occurring and people working in local restaurants and all are screwed. But, just because the rest of the world is in ruins doesn’t mean every sector is in shambles.
You see, unlike past recessions, in this current epidemic, one sector is gloriously going to profit out of the recession. And we all know what that sector is: the technology sector.
Have you nerds checked what S&P500 has turned to in its market cap recently.
Boomers in Wall Street finally caught on. Your S&P500 is now a tech and health care index. Other sectors don’t matter anymore in our economy.
Boomers finally accepted ‘future is tech and health care’ from all these airline companies and all.
Let’s look at SPY major holdings:
Software 8.37% IT Services 5.57% Technology Hardware, Storage & Peripherals 5.16% Pharmaceuticals 5.08% Interactive Media & Services 5.04% Semiconductors & Semiconductor Equipment 4.42% Banks 4.37% Internet & Direct Marketing Retail 4.08% Health Care Equipment & Supplies 3.74% Equity Real Estate Investment Trusts (REITs) 3.11%
So summed up:
Technology (Software/IT Services/ Technoloy Hardware/Interactive Media/ Semiconductor/Internet) is:
8.37 + 5.57 + 5.16 + 4.42 + 4.08 = 27.6%
And for Health Care (Pharmaceuticals / Health Care Equipment):
5.08 + 3.74 = 8.82%
Over 36.4% of SPY is technology and health care currently.
All this cry about real estate, hotels, restaurants, airlines collapsing:
Real Estate: 3.11% Hotels and Restaurants: 1.55% Airlines: 0.2%
Even IF every single real estate, hotel, restaurant, airline company went bankrupt in the S&P500, it’s only 4.86% of SPY. Big boomer money on Wall Street must have finally noticed this.
SPY calls 300 end of this year.
By end of this epidemic, we might have almost half of SPY be technology and health care.
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.