Markets · 6 pages · 12 min

Why the S&P 500 is not the economy

The S&P 500 tracks large listed United States firms by a market-value recipe, not national output.

I understand the following: I can download a file of this brief, and I can also read it in the library on this browser. Clearing the cache or cookies deletes the library copy. The file must be downloaded for access to be retained.

When the purchase is complete, return to the original window. It will refresh.

From the opening

The S&P 500 is a recipe aimed at large publicly listed United States companies, chosen under a provider's rules and weighted by market value. Gross domestic product is a tally of production across the whole economy, including private firms, government, and households, so the two objects are not measuring the same thing. The opening covers large listed firms only, weights follow market value, and output is a different tally.

The rest of the brief — the later sections and the reading notes — opens after Stripe confirms payment.

Inside

Large listed firms only
Weights follow market value
Output is a different tally
Foreign sales sit inside tickers
Where the idea stops applying
A distinction worth keeping

Sources

S&P 500 index methodology
Gross domestic product

03Reading a balance sheet in one sittingMarkets34 min$22 11What a credit score is countingMarkets28 min$20 0890How a stock is a slice of a companyMarkets12 min$11

Why the S&P 500 is not the economy

From the opening

Inside

Sources

Also on the desk