MyMoneyBlog.com

Another concerning chart. US stock performance, as measured by the S&P 500 index, continues to be at or near all-time highs. Consumer sentiment meanwhile, as measured by the University of Michigan’s Consumer Sentiment Index, is at all-time lows. The chart below calls it “Wall Street vs. Main Street” via Kobeissi Letter.

The gap between Wall Street and Main Street has never been bigger:

US consumer sentiment is down to 47.6 points, the lowest level in history.
At the same time, the S&P 500 is trading just 3% from its all-time high.
Since the 2020 pandemic, consumer sentiment has fallen -50%.
During the same period, the S&P 500 has rallied +205%.
This comes as inflation, rising housing costs, and a weakening job market are increasingly squeezing the average American household.
Meanwhile, 87% of all equities are held by the wealthiest 10% of households.
Asset owners are the biggest winners in this economy.

More commentary from Barry Ritholtz:

What’s on my mind these days? Here’s one thing. Based on this Bridgewater article, out of any 15-year period to be invested in US stocks dating back to 1970, the one we’ve just lived through was the best (2010 through end of 2024).

I was a bit surprised to see this. I’m disappointed that the same chart for growth in average inflation-adjusted worker income does not look the same at all. What does it mean for the future? I have no idea. Maybe our economic system is just tilted towards rewarding businesses instead of the average worker now, and high performance will be the norm. Maybe the next 15 years will have horrible performance, but the average worker will earn a much better relative income. Will AI simply reward the huge corporations even more, or will we find a way to distribute the benefits?