The Financial Riddler 6-15-24
Beg your third cousin, 2nd removed from your mother's side for help. That helped me.
The top ten companies with the largest market cap (value of their outstanding stocks) constitute to following share of the S&P 500.
a. 82 percent
b. 59 percent
c. 35 percent
d. 23 percent
e. 18 percent
And the answer is …
The answer is 35 percent. See the chart below constructed by Apollo’s Chief Economist, Torsten Slok. Microsoft, which comprises 7 percent of the S&P, leads the list. Nvidia and Apple are very close behind. Further back, with shares ranging from 4 to 2 percent are Alphabet (Goggle classes A and C combined), Amazon and Meta. Berkshire Hathaway, Eli Lilly, and Broadcom each account for roughly 1.5 percent of the stock market. The list of top U.S. companies is remarkable. Most are tech, not manufacturing companies. Or they are manufacturing companies, like Tesla, whose physical products are tech-laden.
Tesla’s Model Y is its most popular EV. The base version sells for roughly $50K. Fully loaded, a Model Y will run you $70K. How much, roughly speaking, is labor cost of a Model Y?
a. 10 percent
b. 20 percent
c. 30 percent
d. 40 percent
e. 50 percent
And the answer is …
The answer is I don’t know for sure. But by considering a variety of indicators, including this 2018 article, my guess is 10 percent. Nominal wages of autoworkers haven’t increased for seven years. Meanwhile, prices have risen by 28 percent.
Which postwar President’s Administration averaged the lowest inflation rate?
a. Eisenhower
b. Kennedy
c. Johnson
d. Nixon
e. Ford
f. Carter
g. Bush I
h. Reagan
i. Clinton
j. Bush II
k. Obama
l. Trump
m. Biden
And the answer is …
The answer is Kennedy. Inflation averaged just 1.1 percent during his presidency. Carter took top honors with inflation averaging 9.9 percent in his four years. Ford, at 8.0 percent, isn’t far behind. Nixon and Biden are tied for fourth and fifth place, with inflation of 5.7 percent.
Total bankruptcy — business and household — filings last year were
a. Twice as high as in 2019
b. One fifth higher than in 2019
c. The same as 2019
d. 20 percent lower than 2019
e. 40 percent lower than 2019
And the answer is …
Total bankruptcies are running 40 percent below their 2019 value. The 2023 total was 452,990. In 2019, it was 774,940. The big decline — 434,064 this past year from 752,160 five years back — was among households. Business bankruptcies fell from 22,780 in 2019 to 18,926 last year.
Total employment, apart from COVID, has grown at roughly the same rates under President Biden as under President Trump?
a. True
b. False
c. The same
And the answer is …
The answer is true. Employment has grown rapidly under both presidents. See the chart below.
There are 338 million U.S. residents. What share travelled overseas last year?
a. 2 percent
b. 5 percent
c. 13 percent
d. 15 percent
e. 20 percent
f. 30 percent
And the answer is …
The answer is 15 percent. An all time high of close to 50 million Americans traveled abroad. As the chart below, from Statistica, shows, measured by their decision to travel, households are feeling reasonably prosperous.
Number of United States Residents Traveling Overseas from 2002 to 2023(in millions)
The economy is growing, employment is growing, inflation is down in half from two years ago, and the unemployment rate remains low. Is consumer sentiment
a. Soaring
b. In the tank
And the answer is …
The answer is it’s in the tank. Check out this figure, which shows GDP annual growth in black and the annual growth in the Index of Leading Economic Indicators (LEI) in blue.
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