Gravitational Pull

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By Matthew Gutierrez and Shawn O'Malley · May 01, 2024

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???? The S&P 500 is taking a chill pill.

We’re amid the first 5% dip of the year, thanks largely to worries over global tensions and stubborn inflation numbers.

But let's not forget that the S&P shot up ~28% in just half a year from October to March. Investors are taking a breather, as they normally do: 5% pullbacks happen about four times yearly, even in good times.

They're so common that since 1900, the market has spent more than half its time in 5% dips.

But hey, rally resumed? Maybe. Stocks rose Wednesday, then dropped, after Federal Reserve Chair Jerome Powell (mostly) ruled out that the central bank’s next move could be a hike.

— Matthew & Shawn

Here’s today’s rundown:

Today, we'll discuss the biggest stories in markets:

• Ozempic gobbles up a whole economy
• A new twist on the 401(k)

This, and more, in just 5 minutes to read.

POP QUIZ

In what year was the 401(k) plan introduced in the United States? (Scroll to the bottom to find out!)

Chart of the Day

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In The News

?? The Ozempic Effect: Gobbling Up An Entire Economy

Novo Nordisk isn’t merely a pharmaceutical giant — the maker of Ozempic and Wegovy is now Europe’s most valuable company. And lately, its home country, Denmark, has been hooked on that success.

A new Bloomberg story explores its impact on Europe through its groundbreaking drugs Ozempic and Wegovy. The medications that target diabetes and obesity have become global phenomena, attracting widespread attention from consumers, investors, and policymakers.

Gravitational pull: Novo Nordisk has become Europe's most valuable company (over $570 billion). The country’s economy grew 1.9% last year, among the fastest in Europe, and almost all thanks to the pharmaceutical industry, led by Novo.

• Novo’s rise has transformed Denmark's economy; its market capitalization has exceeded its GDP. Its philanthropic foundation rivals the Gates Foundation in assets, and its tax contributions have boosted government spending, particularly in areas such as defense, environmental initiatives, and support for Ukraine.
• Novo’s trickle-down effect is enormous, even down to local flower shops, which have been “exceptionally busy preparing welcome bouquets for new Novo employees.”
• Said the mayor of Kalundborg, Denmark: "Today, it’s known as Novo City."
• Novo Nordisk's influence extends beyond economics, shaping educational priorities, research agendas, and political decisions.?

There are also risks, both for the company and its home market. The company's strategic decisions can have far-reaching consequences, impacting everything from public finances to academic research and employment prospects for Danish graduates.?

Why it matters:

Roughly two out of three U.S. adults are overweight or obese (69%), and about one out of three are obese. There’s a huge market here.?

Diabetes and obesity drugs have...