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‘Who’ To Thank For Stocks’ Blind Eye To Powell Drama
I try to strike a healthy balance between characterizing ("caricaturing" is probably more apt on som
Thanks.
Given that bid + share buybacks, I’m surprised the S&P isn’t even higher. There must be some large sellers out there?
I asked Google AI for its best guess at how much money U.S employees (plus employer contributions) put into 401K’s per month. It said roughly 50 billion (600 billion a year). I also asked it to guess what the average amount of money was that is added to the stock and bond markets each month. It said 100 – 200 million. So, assuming midpoint value ~150 million; that says roughly 33% of the money added to the stock and bond markets each month is 401k contributions. Note: a lot of guesses and assumptions but i thought it was interesting.
AI’s workings are below:
Including employer contributions, the best estimate for the total amount going into 401(k)s in the United States annually is roughly $600 billion.
This estimate is based on the following:
Average Employee Contributions: Based on 2023 data, the average US worker with a 401(k) contributed $5,993 to their account.
Average Total Contributions (including employer match): The average total contribution to 401(k) accounts in 2023, including employer contributions, was $8,618.
Number of Participants: There were approximately 70 million active 401(k) participants as of September 30, 2024.
The average total contribution multiplied by the number of participants ($8,618 per participant × 70,000,000 participants) results in a rough annual estimate of $603.26 billion. This figure includes both employee and employer contributions.
Ot used to be said that the monster chunk of that was concentrated in January. I recall that it was labelled “the January effect.” Perhaps it is more evenly distributed now?
I find this very interesting. I could not find this information, but I am not AI savvy.
How about the amount contributed to IRA’s? Traditional and Roth.
Thanks for the update. T2, classic. “Chill out, di*kwad.”
When the headlines hit on “Trump to fire Powell”, stocks, rates, and USD all reacted in unison, fast and hard and not in a good direction, then when “Trumps says he won’t” headlines followed, stocks and rates recovered fast and almost completely, while USD recovered only partly. Strategists are now saying “he won’t aka TACO”, investors figure they have until July 30th anyway.