A narrowing is overdue

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This can’t—and won’t—last forever. On the one hand, the financials’ weighting in the S&P 500 has now fallen by so much that it’s as low as it’s been (except during the financial crisis) in nearly 30 years.

While on the other hand, the financials’ likely share of the S&P 500’s earnings this year is much, much higher than that, at 17%.

As I say this divergence isn’t apt to last forever, and I bet it will be closed by—and this is not a recommendation—the financials’ weighting in the S&P 500 rising meaningfully from its current near record-low levels.