Winner Take All?

Is the stock market “winner take all”? Just 1.3 percent of the world’s public companies account for all the market gains during the past three decades, according to a new study from a professor at Arizona State’s Business School. Outside the U.S., the gains are even more concentrated, with less than 1 percent of all equities driving all of the net appreciation in share prices.

From 1990 to 2018, just five companies - Apple, Microsoft, Amazon.Com, Alphabet Inc. (Google) and Exxon Mobil - accounted for 8.3 percent of global net wealth creation. But those five companies account for just 0.008 percent of the total sample set of 62,000 publicly traded companies.

During that 1990-2018 period, the best-performing 811 companies accounted for the entire net stock market appreciation of $44.7 trillion (in excess of the returns you could get from Treasury bills).  Meanwhile, a majority of stocks - 37,195, or 60.9 percent - were net money losers, subtracting a $21.83 trillion from the total.

Second Quarter GDP Report

Growth decelerated in the second quarter as tariffs and a global slowdown weighed on the U.S. economy, the Commerce Department reported this morning. GDP increased by 2.1 percent in the quarter, down from 3.1 percent in the first quarter.

The biggest factors driving growth last quarter: Personal consumption expenditures rose 4.3 percent, the strongest performance since the fourth quarter of 2017. Government consumption expenditures and gross investment rose 5 percent, the fastest pace since the second quarter of 2009. At the same time, gross private domestic investment tumbled 5.5 percent, the worst since the fourth quarter of 2015.

This morning's report also featured revisions for the past five years. Updated government figures show that GDP expanded 2.5 percent on a fourth-quarter-over-fourth-quarter basis last year, down from the previous estimate of 3 percent .

Tesla's Crash

One of the biggest casualties of this week's earnings report: The electric-car maker Tesla. The Wall Street consenus had the ecletric-car maker losing 40 cents per share this quarter. Instead, it lost nearly three times as much, $1.12 per share.

That's a big miss, resulting in the stock losing 10 percent of its value in a single day. But on the other hand, Tesla had lost $3.06 per share during the same period last year. So the company is at least losing less money now.

But there was also some good news from Tesla. It reaffirmed its guidance for full-year delivery, saying it still expects to sell 360,000 to 400,000 vehicles this year, mostly Model 3s.

Rumblings in the Housing Market

Sales of previously owned homes slipped 1.7 percent in June, reflecting ongoing weakness in the U.S. housing market despite a sharp drop in mortgage rates. Existing-home sales sold at a 5.27 million annual pace last month, down from 5.36 million in May, the National Association of Realtors said yesterday.

A 30-year fixed-rate mortgage averaged 3.8 percent in June vs. almost 5 percent last November. But even after that big drop in mortgage rates, sales of previously owned homes are 2.2 percent lower than a year ago.

On the other hand, the median selling price in June rose 4.3 percent to $285,700 from a year earlier. That means that home prices have now risen in every month for more than seven years.

The Problems of Newlyweds

Is someone you know planning to get married? Here’s a little cautionary warning you can give them: Most engaged couples and newlyweds don’t talk about money on a regular basis, according to the findings of a new survey by Northwestern Mutual and wedding planning and registry specialist The Knot.

Only 37 percent of newlyweds and engaged couples talk about their finances monthly. While being on the same page financially is critical to a happy, long-lasting marriage, 72 percent of those surveyed do not have a clear plan when it comes to saving for their passions.

The ironic thing is that 82 percent of couples feel closer to their partners when they’re in agreement about money. But at the same time, 40 percent feel anxious when they think about financial planning as a couple - and 20 percent admit to hiding purchases and cash from their partners.

The Big Week Ahead

If you're a stock investor, this is a week for you to keep your eyes and ears open. One-third of the 30 components of the Dow Jones Industrial Average and 144 companies on the S&P 500 index are due to report their earnings, making for one of the busiest earning stretches this season.

The parade of reports could provide some good news for a market that has mostly skidded lower over the past several sessions. Both benchmarks, as well as the tech-heavy Nasdaq, finished Friday with their steepest weekly declines since the end of May.

The big names from the Dow that are set to report include Coca-Cola, Caterpillar, McDonald’s and Visa. But maybe the most intriguing is a non-Dow company, Facebook, which will report earnings on Wednesday. Facebook is expected to announce a $2 billion hit to earnings in order to settle a fine from the FTC over data privacy. 

New Jersey's New Claim to Fame

Which state saw the biggest drop in its unemployment rate last month? Why, it’s our own New Jersey. Unemployment here in the Garden State dropped from an already low  3.8 percent in May to 3.5 percent in June, according to new figures out from the Bureau of Labor Statistics.

That 0.3 percentage point drop edged out Colorado and Alabama, which both fell by 0.2 percentage points, to lead the nation last month. The overall nationwide unemployment figure is 3.7 percent, but state unemployment figures range from a low of 2.1 percent in Vermont to a high of 6.4 percent in Alaska.

New Jersey’s 3.5 percent unemployment rate marks the lowest in our state’s history for as long as these figures have been kept, which dates back to 1976. According to the BLS, we have added 47,600 jobs over the past 12 months.