The Dow Jones just hit a new all-time high.
Meanwhile, the S&P 500 is right in the vicinity of two previous peaks, in 2000 and 2007.
So how’s the market changed over this time?
This great chart from Goldman Sachs looks how the market cap weighting of various sectors within the index has changed over the years.
Back during the tech bubble, tech composed 32 per cent of the index. During the last peak it was finance at the top. Now tech is at the top again.
Photo: Goldman Sachs
Meanwhile, BTIG’s Dan Greenhaus makes some other quantitative observations about the difference between now and 2007.
So with the Dow making a new closing high, we’ve been fielding numerous calls from journalists regarding its importance or significance. Ignoring those conversations, it did get us thinking about the differences between then and now. Then, the S&P’s forward PE was roughly 15.5x whereas today, it’s about 13.2x. As the tables below illustrate, financials were (of course) a much larger percentage of the market when compared to today with the weighting loss dispersed among the other sectors (the sector is still down 49.7% from its high). The 10 year averaged more than 4.50% in October 2007 while today its 1.90% and the CPI, which was more than 4% at the end of 2007, is currently less than 2.0%.
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