By Marc Chandler, Global Head of Currency Strategy, Brown Brothers Harriman
This Great Graphic was on Barry Ritholtz’s Big Picture blog. It originally was from Morgan Stanley’s Adam Parker. It notes that nearly 90% of this year’s earnings growth of the S&P 500 companies can be traced to 2% or 10 companies.
There seems to be two industries represented and Big Oil is not one of them. It is finance with 6 of the top 10, but if you allow the inclusion of GE (due to GE Finance), finance accounts for 70%. Technology is the other industry, led by Apple, IBM and Western Digital.
It is even more concentrated than the chart suggests. Four companies–three financial services (AIG, Goldman and Bank of America) and one technology firm (Apple) provided over half of the earnings growth of the S&P 500.