9. The big picture: macro, markets and news

The market heatmap (HM)

HM draws the largest US stocks as rectangles sized by market value and colored by today's change.

  • 3 min
  • 3 questions
  • Lesson 3 of 6

Why you would care

What is the whole market doing today, at a glance? An index can be flat while half its members rise and half fall. A heatmap shows that instantly, and shows which giant moved the index: when a company worth 5 trillion dollars falls 2%, it outweighs dozens of small winners. It is the screen people screenshot for "today in markets".

The idea from scratch

A heatmap (here a treemap) encodes two numbers per stock:

  • Size of the rectangle = market capitalization (price x shares). Bigger companies get bigger boxes.
  • Color = today's % change. Green up, red down; the intensity shows the size of the move. Grey means no change or no data.

Why size matters: in a cap-weighted index like the S&P 500, each company's influence equals its share of total market value.

Diagram: Market cap leads to Box size; Today's % change leads to Box color; Box size leads to Heatmap: who moved, and does it matter; Box color leads to Heatmap: who moved, and does it matter.
Wide diagram: scroll sideways to see all of it.

See it in Gloom

Gloom screenshot: HM, US Stocks tab
HM, US Stocks tab: the largest US-listed companies sized by market cap and colored by daily change. Historical example.

open ittype HM. Tabs: US Stocks, US ETFs. In newer versions (after 0.15.8) it can also map your own portfolio list.

  1. NVDA -0.41% Mkt $5.42T Vol 76.42M: the largest box, slightly red.
  2. META +4.50%: the brightest green among the giants.
  3. WMT -2.66%: a clear red box.
  4. Two boxes for Alphabet (GOOG, GOOGL) and Berkshire (BRK-A, BRK-B): different share classes of one company.
  5. Grey boxes: no change or no data for that name.
  6. Small boxes cut their labels (TC…, ID…): hover or open them for details.

Practice and recap

Try it3 tasks
  1. In the screenshot, which of the five largest companies rose? (GOOG/GOOGL, and META among the next ones.)
  2. Why might the market fall when most boxes are green? (A few very large red boxes outweigh many small green ones.)
  3. Name two tickers that are share classes of the same company. (GOOG and GOOGL, or BRK-A and BRK-B.)
Common mistakes4 mistakes
  • Counting boxes instead of weighting by size.
  • Reading color intensity as volume; it is the size of the % move.
  • Forgetting share classes and double counting a company.
  • Treating a heatmap of a delayed feed as live.
Check yourself3 questions
  1. What does box size represent?
  2. What does box color represent?
  3. Why can one stock dominate the heatmap's story?
Answers
  1. Market capitalization.
  2. Today's percentage change.
  3. Because in a cap-weighted market the largest companies carry most of the weight.
Words in this lesson4 words
heatmap (treemap)
Rectangles sized by one value and colored by another.
cap-weighted
Each member counts in proportion to its market value.
market capitalization
Price x shares outstanding.
share class
One of several kinds of shares of the same company.

Educational material about reading market data, not investment advice.