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THINGS YOU MIGHT NOT KNOW BUT PROBABLY SHOULD

by Fortem Financial June 24, 2024

1. An AI search uses 10x the amount of electricity than that of a Google search.

2. The EIA expects global electricity usage from data centers to increase by 540 terawatts from 2022 to 2026. “This is roughly the equivalent of the electricity usage of Japan” in one year.

3. Despite government subsidies, natural gas provides 10x the amount of electricity to the American power grid than does solar.

4. Coal still provides 16% of America’s electricity generation, according to the EIA.

5. The 10 largest stocks in the S&P 500 now make up 37.5% of its market cap.

6. Those same stocks have average annual profit margins of 26% over the last twelve months with an average of growth in earnings of 264%.

7. Nvidia boasts a market cap of $3.4 trillion despite having only 29,600 employees. This is the greatest market cap-to-employee ratio by a factor of almost 3:1. Broadcom is in second place.

8. S&P 500 companies with earnings have underperformed those without earnings by 220 basis points since March 2020, the start of the pandemic. Companies with earnings are outperforming those without earnings by over 500 basis points YTD.

9. The Magnificent 7 accounts for 20% of the overall S&P 500 index LTM capex, up from only 6% back in 2015.

10. The S&P 500 Index currently trades at 22.4x 2024 earnings estimates and 19.6x 2025 earnings estimates of ~$279.

11. The United States currently has a total debt of $34.6 trillion, $24.9 trillion is marketable to the public. The weighted average interest rate of marketable debt is currently 3.2%, well below interest rates at every part of the yield curve.

12. Roughly 55% of our marketable debt matures in the next three years.

13. America’s net interest expenses are set to exceed both defense spending and Medicare spending respectively in FY 2025.

14. The number of publicly traded companies has declined by 36% since 1997. The AUM of private equity firms has increased from $645 billion in 2000 to $10 trillion in 2023.

15. Equity option volumes have increased at a 22.8% compound annual growth rate from 2019 to 2023. They increased at a 10.6% CAGR from 2000 to 2019.

16. The average price of a stock in the S&P 500 is currently $217, more than 6x greater than the average price of $34 in 1990.

17. Strategas’ Common Man CPI has exceeded the headline CPI number in 35 of the last 40 months. It currently stands at +3.7% y/y.

18. If all the countries in NATO currently below the Treaty’s defense spending guideline reached the target, it would result in additional spending of $44 billion a year based on 2024 outlay estimates. If Japan reached its new target of defense spending of 2% of GDP, it would result in an additional $16 billion in spending based on 2024 outlay forecasts.

19. It is becoming consensus among investors that former President Trump will win reelection in November. Roughly 90% of those surveyed at recent Strategas events believe he will be the next President. The Real Clear Politics Betting Average places former President Trump as the favorite at 52.3%.

20. The number of 25 bps cuts priced in the Fed Funds futures market, which started the year at nearly 6 for this calendar year, has stabilized at roughly 2 over the last two months.

21. There have been just 6 prior rate cuts since 1972 with readings below a 4% unemployment rate.

Source: Strategas

 

Market and Index Changes for the Week Ending 6/21/2024

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments. Data provided by Refinitiv.

 

Sincerely,

Fortem Financial
(760) 206-8500
team@fortemfin.com

 

 

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Brian Amidei, along with Partners Joseph Romano and Brett D'Orlando have also been named *2014, 2015, 2016, 2017, 2018 Five Star Wealth Managers!

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The Five Star Wealth Manager award is based on 10 eligibility and evaluation criteria: 1) Credentialed as an investment advisory representative (IAR) or a registered investment advisor; 2) Actively employed as a credentialed professional in the financial services industry for a minimum of five years; 3) Favorable regulatory and complaint history review; 4) Fulfilled their firm review based on internal firm standards; 5) Accepting new clients; 6) One-year client retention rate; 7) Five-year client retention rate; 8) Non-institutionalized discretionary and/or non-discretionary client assets administered; 9) Number of client households served; and 10) Educational and professional designations. The inclusion of a wealth manager on the Five Star Wealth Manager list should not be construed as an endorsement of the wealth manager by Five Star Professional or the magazine. The award methodology does not evaluate the quality of services provided. Additional information about this award is available at: fivestarprofessional.com/2016FiveStarWealthManagerMethodology.pdf
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The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighed index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

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