FYI: The market has seemed pretty top-heavy lately. We think the concerns around weak breadth have been a little bit overstated, though, as we mentioned in our Chart of the Day yesterday. But it’s still worth asking the question: how much of the market’s gain is attributable to the largest stocks? Below we show three series. The light blue line is returns for the S&P 500 YTD. In the dark blue line, we strip out the performance contribution of the five largest stocks in the S&P 500: Apple (AAPL), Facebook (FB), Amazon (AMZN), Microsoft (MSFT), and Alphabet (GOOGL). As shown, while the overall index is up almost 8% so far in 2017, it’s up only 4.6% if you strip out the five largest stocks. In the red series below we show the spread between the two, in other words, the cumulative performance contribution from those 5 stocks. At the start of the year, these five stocks accounted for 11.6% of the index’s market cap, so you’d expect a non-trivial percentage of gains to come from them. That share stands at about 13.7% today. Generating nearly half of the index’s gains with less than 15% of its market cap is an out-sized contribution and shows just how painful it can be in terms of relative performance if you’ve been underweight these mega-Tech behemoth
Regards,
Ted
https://www.bespokepremium.com/think-big-blog/five-largest-stocks-account-for-nearly-half-of-2017s-gains/

FYI: BlackRock Inc (BLK.N) will initially pay about $60 per square foot in rent for its future headquarters in the Hudson Yards district on the far west side of midtown Manhattan, the company said in a filing on Thursday.
BlackRock, which oversees $5.4 trillion in assets and is the world's largest asset manager, is moving into 847,000 square feet (78,690 sq meters) of a development that will be part of a neighborhood rising over rail yards and tracks in a once-forlorn corner of New York City.
Regards,
Ted
http://www.reuters.com/article/us-usa-property-hudsonyards-blackrock-idUSKBN18L2BY?feedType=RSS&feedName=businessNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+reuters/businessNews+(Business+News)

FYI: With Alphabet (GOOGL) and Amazon (AMZN) racing tick for tick towards the $1,000/share level but coming up just shy today, we just can’t help but be reminded of another run towards the 1,000 milestone 51 years ago. For the sake of the two stocks and the overall market, though, we hope that this time around, the $1,000 level isn’t nearly as tough a nut to crack. The battle for 1,000 we are talking about from 51 years ago was the Dow Jones Industrial Average. Back in 1966, after a rally of nearly 20% off of its June 1965 lows, the DJIA was knocking on the door of 1,000 but came up just shy of the mark, closing at 995.15 on 2/9/66. While the DJIA didn’t cross 1,000 on February 9th, we can’t help but think that most people felt it was just a matter of time before the 1,000 level was breached.
Regards,
Ted
https://www.bespokepremium.com/think-big-blog/alphabet-and-amazon-bring-back-ghosts-of-1000s-past/

Yes, even SHLD recovered a bit ... up 30% at one point today, only to fall back 16% to gaining "just" 14%. I believe yesterday too it was up 5% early only to close with a loss.
But not a lot of solace I suspect for long-time holders ...

FYI: U.S. stocks rose on Thursday, with the S&P 500 and Nasdaq Composite hitting new highs, helped by gains in the consumer discretionary sector after strong reports from Best Buy and other retailers.
Regards,
Ted
Bloomberg:
https://www.bloomberg.com/news/articles/2017-05-24/asia-stocks-look-mixed-as-dollar-slips-on-fed-markets-wrap
Reuters:
http://www.reuters.com/article/us-usa-stocks-idUSKBN18L1HC
MarketWatch:
http://www.marketwatch.com/story/us-stocks-poised-for-6-wins-in-a-row-but-opec-lies-in-wait-2017-05-25/print
IBD:
http://www.investors.com/market-trend/stock-market-today/bullish-session-beefy-gains-netflix-gaps-up-ulta-spikes-after-close/
CNBC:
http://www.cnbc.com/2017/05/25/us-markets.html
AP:
http://hosted.ap.org/dynamic/stories/F/FINANCIAL_MARKETS?SITE=AP
Bloomberg Evening Briefing:
https://www.bloomberg.com/news/articles/2017-05-25/today-s-top-stories-a-secret-plot-to-sell-banned-oil
WSJ: Markets At A Glance:
http://markets.wsj.com/us
SPDR's Sector Tracker:
http://www.sectorspdr.com/sectorspdr/tools/sector-tracker
SPDR'S Bloomberg Sector Performance Pie Chart:
https://www.bloomberg.com/markets/sectors
Current Futures: Positive
http://finviz.com/futures.ashx

HY Bonds are not confirming the recent uptick in the S&P 500. In fact they are indicating a pull back in equities.

The SP500 has rebounded from the May 17 one-day panic to push to a higher high. But high-yield bond ETFs like HIO are not confirming that higher high, and that’s a problem.
High yield bonds typically move in sync with the stock market rather than with T-Bonds. They are all about liquidity and default risk, much more so than inflation and other interest rates. So when liquidity starts to dry up, that condition often shows up first in the high-yield bond market. Eventually those liquidity problems come around to bite the rest of the stock market. So it is important to pay attention to these divergences.

Source:
mcoscillator.com/learning_center/weekly_chart/junk_bonds_dont_confirm_higher_highs/

FYI: Vanguard Group Inc.’s Bill McNabb, who leads the world’s largest mutual fund company, said he is “very cautious” about the U.S. market as stocks have surged to record levels.
Regards,
Ted
https://www.bloomberg.com/news/articles/2017-05-25/vanguard-s-mcnabb-cautious-on-u-s-as-s-p-500-surges-to-a-record

Around half of SP500 earnings are overseas-related, I have read.

Yeah, tough for most investors to sit through 50-60-70% drawdowns, even if they believe they possess a high risk tolerance and have a long time horizon.

Meb's shop had 8 funds (at least 3 months old) through April with about $400M in AUM. Average age 2.6 years with Shareholder Yield SYLD being oldest at nearly 4 years and largest at $126M. Average ER = 0.55%. The fund family has a mixed record with half its funds beating peers and the other half trailing since inception, giving it a "Middle" rating on the MFO Fund Family Scorecard. That's an improvement for this young family, which was in the basement for a while. The value-based funds have performed the worst, putting them in some good company. Click on image below to enlarge ...

FYI: Providing historical context is one of the roles we play on behalf of our clients.
And that’s a good thing, because for an investor who just began paying attention to markets in the last ten years, the extent of their context is that the S&P 500 is the only game in town worth playing, it always goes up, and dollars invested in anything else are wasted.
Looking out past this period, however, and you see that this is plainly not the truth. It’s our job to not only make sure that clients understand this, empirically, but that they’re invested in such a way so as to take advantage of the myopia of others.
Regards,
Ted
http://thereformedbroker.com/2017/05/24/what-were-telling-clients-about-european-stocks/

FYI: Goldman Sachs & Co. Senior Investment Strategist Abby Joseph Cohen says equity markets are priced to continue to perform well, but she sounded alarms about fixed income.
Regards,
Ted
http://www.fa-mag.com/news/abby-joseph-cohen--fixed-income-headed-for-trouble-32905.html?print

FYI: People often argue that financial knowledge can be acquired with experience. But if the evidence from a new survey index is any indication, that way of learning may, in fact, be very slow or not work well at all.
Regards,
Ted
http://www.marketwatch.com/story/most-americans-are-driving-blind-when-it-comes-to-financial-decisions-2017-05-25/print

Solution.. Voluntarily agree to having your investment gains (LTCG, STCG, Dividends, interest. etc.), and income, taxed at 50%; you will be doing your country, and political ideology, a HUGE favor!!!

With a little help from President Donald Trump's pro-business proposals, it's not hard to see the market surge 50 percent, Nobel Prize-winning economist Robert Shiller told CNBC on Wednesday.
http://www.cnbc.com/2017/05/24/robert-shiller-with-trump-its-not-hard-to-understand-market-going-up-50-percent.html?utm_source=dlvr.it&utm_medium=facebook

FYI: Cambria Investment Management launched a new exchange-traded fund today -- it’s 11th -- and with the name Core Equity ETF (CCOR), it sounds like another runoff the mill equity fund.
Here's the twist. The actively-managed fund focuses on dividend growers, investing in high-quality companies, but also uses options to help investors access cheap volatility and manage downside risk.
Regards,
Ted
http://www.barrons.com/articles/new-cambria-etf-dividends-options-and-a-big-launch-1495653945

FYI: The good news is that the Department of Labor’s fiduciary rule, which states that any broker or manager offering advice on retirement-savings accounts must put the clients’ interests first, looks like it will survive. It goes into effect officially on June 9.
The bad news? There is no evidence that Secretary of Labor Alexander Acosta either understands the reasons for the rule, or believes it is important. He makes that much clear in an op-ed in the Wall Street Journal:
Regards,
Ted
https://www.bloomberg.com/view/articles/2017-05-24/retirement-savers-really-do-need-government-help

"Vanguard is essentially a non-profit, because it is owned by the investors in its funds. Therefore any profits it earns are returned to the investors in its fund in the form of lower fees. In contrast, Blackrock is a for-profit publicly traded company. It remains highly dependent on management fees from ETFs, which were the source of roughly a third of its $11.1 billion in revenue in 2016. Cutting fees on all their ETFs to Vanguard prices (not just their new “core” share classes) would cost Blackrock over $500 million in profits, which would be an almost 20% hit to their earnings …"
Wow! I knew running a fund firm could be lucrative, I just didn't realize how lucrative.

TBHDX ? If so IMHO they rely too much on financials and healthcare companies (read: low yields) in the construction of their portfolio with little to nothing in the usual dividend paying suspects like utilities and telecom. I somewhat understand that since they tend to be a 'value' shop but....
Also, again IMHO, their 'high' dividend is roughly what the S&P 500 pays and their ER cuts that in half. One would be better off in SPY or at least SCHD. For what my non-economic/financial background opinion is worth.

FYI: Not only do the companies reward shareholders with income, but they also tend to dominate within their own industries.
Regards,
Ted
http://www.marketwatch.com/story/these-dividend-aristocrat-stocks-rack-up-double-digit-sales-growth-2017-05-16/print
M* Snapshot NOBL:
http://www.morningstar.com/etfs/bats/nobl/quote.html
M* Snapshot SDY:
http://www.morningstar.com/etfs/arcx/sdy/quote.html