The cryptocurrency chaos continued on Thursday, as investor sentiment on stocks exhibited similar jitters, though equities opened higher.
One of Felder’s mantras is to look for investing opportunities outside of major indexes. The rise of passive investing, with massive funds passively tracking stock market indexes, makes these opportunities more prevalent and attractive, he said. “In this way, ESG has merely served to magnify the momentum that passive index funds create when they allocate more new money to stocks and sectors with rising values, like tech and communications services,” Felder said, with funds allocating less new money to sectors with falling values, like energy.
Felder pointed to the chart, above, which shows historical weightings within the S&P 500 SPX, +0.44% index. Energy has a smaller portion that it did two decades ago, at the beginning of its last major bull market. Tech and communications-services stocks are slightly below all-time highs notched at the peak of the dot-com bubble.
On the economic front, 444,000 Americans filed for unemployment last week, less than the 452,000 expected and a decline from 478,000 in the week prior. There were 3.75 million continuing jobless claims in the week of May 8, and the Philadelphia Federal Reserve manufacturing index for this month decline from 50.2 in April to 31.5—less than the 40.5 expected. Later, the Index of Leading Economic Indicators is due.
Stocks in Europe SXXP, +0.73% UKX, +0.37% PX1, +0.81% DAX, +0.99% and Asia NIK, +0.19% HSI, -0.50% SHCOMP, -0.11% were more mixed, with some equity indexes rebounding, but not as much as they fell on Wednesday.The Canadian housing market is off its foundations. Our chart of the day, courtesy of Wolf Richter at the Wolf Street financial blog, illustrates the largest housing and mortgage bubble in the country’s history.