The Goldman Sachs Industrial Average

As you may know, the Dow Jones Industrial Average — the index everyone watches because it’s the index everyone has always watched — is comprised of only 30 stocks. Plus, it’s price-weighted; meaning the companies whose shares sport the highest prices impact the Dow’s move the most.

Now, get this, while I’ve even heard myself say that the Dow’s huge out-performance of the other major averages owes to some degree to the “industrial” (as in the sector that’ll be benefiting mightily from the mighty infrastructure plan to come) in its name, upon further inspection (compliments of Bespoke Investment Group) it turns out that that’s not so much the reason. In fact that’s very little the reason. As it is, Goldman Sachs — yep, that ginormous investment bank — has utterly dwarfed the other 29 members in terms of its contribution to the Dow’s move since election night.

The Dow’s up 1282 points (7%) since 11/8. Goldman’s stock, at $241 per share, is up 33% — which accounts for a whopping 408 points of the Dow’s move. Sure, Caterpillar’s 40% gain and United Technology’s 14% are nothing to sneeze at, but the since-election move of these two industrial monsters accounts for merely 114 Dow points. The gains in the Dow’s remaining industrial companies’ stocks racks up only another 137.

So, Goldman Sachs, all by its lonesome, is responsible for literally 32% of the Dow’s recent move, while the industrial components combined claim less than 20%. Add to Goldman the other financial companies’ stocks featured in the index and the sector itself accounts for 49.6% of the Dow’s move.

Yes, I do like industrials right here, but, clearly, those long-forlorned financials (presently our largest sector target) are feeling the love these days…

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