The S&P 500 is just below its record high. But most stocks in the index are actually down significantly, which has some concerned.

Why it matters: This implies that the gains driving the market index to record highs are not evenly distributed. But, it’s also not an unusual dynamic in the S&P’s recent history.

The details: According to Morgan Stanley research highlighted by Bloomberg on Friday, 56% of S&P 500 stocks were down by more than 10% from their recent highs. This compares to the S&P 500 as a whole, which is down by just 2% from its peak.

What they’re saying: Morgan Stanley chief U.S. equity strategist Mike Wilson predicts the weakness in the underperforming stocks will pull down the stronger stocks in a process he calls a “rolling correction,” eventually leading to the S&P 500 falling 10% from its high.

Yes, but: Brian Belski, BMO Capital Markets chief investment strategist, analyzed the S&P 500 since 1990 and found that it’s far from unusual to see most stocks in the market down significantly even as the index makes new highs.

• On average, 55% of the S&P was down more than 10% from all-time highs at the points when the index closed at new highs.
• During the period, the median stock was down an average of 12.1% from its all-time high when the S&P closed at a new high.

The big picture: Belski, who sees the S&P reaching 4,800 by year-end, acknowledges that the market performance could be “bumpy” going into the end of the year.

• But his point is that there’s nothing particularly unusual about seeing half of the stocks in the market down significantly even as the market averages hit all-time highs. And historically, markets have often gone on to rally to even higher highs.

State of play: Investors and experts are generally pretty bearish about the short-term outlook.

• According to the New York Fed’s new Survey of Consumer Expectations, respondents saw just a 39% likelihood that stocks would be higher in 12 months.
• According to Deutsche Bank’s survey of market professionals, 58% of respondents said they expected the stock market to fall by 5% to 10% by the end of the year. Another 10% said the market would fall by more than 10% during the period.

The bottom line: At any given time, there are lots of winners and losers in the stock market.

• The fact that the S&P 500 can actually be up despite so many of its components being down supports the case for being broadly diversified.

Amazon has raised its average starting pay to $18 an hour and plans to hire another 125,000 workers. (Reuters)

Intuit is buying email marketing company Mailchimp for $12 billion. (Axios)

Oracle's quarterly results disappointed investors as its cloud and hardware business revenues fell short of expectations. (CNBC)

The COVID-19 pandemic has exacerbated economic inequities that women and minority workers and business owners already faced, reinforcing gender roles and widening racial disparities, Axios' Hope King writes.

Driving the news: Against this backdrop, a new partnership between the National Urban League and the moderate Democratic think tank Third Way wants to level the playing field for entrepreneurs — and plans to push for federal action, Axios has learned.

• The initiative, Alliance for Entrepreneurial Equity, aims to create an agenda of policies that will eventually be supported by Congress and President Biden.
• Expected to be on that agenda: equalizing access to capital, networks and markets for minority and women entrepreneurs. 

Why it matters: While many grassroots efforts exist to improve entrepreneurial equity, very few are focused on effecting long-term changes at the federal level.

Context: One study from Yelp from earlier this year found that women-owned businesses, Latino-owned businesses and Black-owned businesses were more likely to close and reopen two or more times, compared to other businesses.

• More than half (51%) of Black-owned small businesses have less than three months’ cash, compared to 44% of all small business owners, according to a recent Goldman Sachs survey. 

What they’re saying: Throughout the pandemic, "we've seen the power of Congress and the federal government in [bringing a] historic amount of change to small businesses," Imani Augustus, director of AEE, tells Axios.

The big picture: From government funding to reconciliation, the talk on Capitol Hill this year has been about rebuilding the economy — and specifically, how to create a post-COVID economy that is “more inclusive and equitable,” adds Gabe Horwitz, senior vice president of the economic program at Third Way.

The bottom line: “We need far more small businesses, period,” Horwitz says.

Americans expect stuff to get a lot pricier.

Why it matters: Even though inflation may not actually rise to expected levels, the expectations alone can affect behavior.

• “Some research shows when consumers expect higher inflation they pull back on spending,” MacroPolicy Perspectives founder Julia Coronado said.

By the numbers: According to the New York Fed’s August Survey of Consumer Expectations, respondents see the rate of inflation rising to 5.2% a year from now, up from 4.9% in last month’s survey.

• Three years from now, the inflation rate is expected to be 4.0%, up from 3.7% last month.
• Both figures represent the highest readings since the survey began in 2013.

State of play: Business anecdotes continue to confirm that inflation remains a challenge.

• “Unfortunately, inflation is higher than we even thought in the third quarter,” 3M CFO Monish Patolawala said at a Morgan Stanley conference on Monday. “Despite taking price up… we are seeing inflation outstrip price.”

What to watch: The August Consumer Price Index report, which will be published at 8:30 ET this morning, will give a fresh update on what inflation looks like today.

This holiday season, e-commerce sales in the U.S. will likely be 50% higher than 2019 levels, Hope writes.

• Brick and mortar retailers' sales will also be up over the same period, but by just 9%, estimates a new Deloitte report released this morning.

Why it matters: The pandemic drove businesses and consumers online — habits that are sticking around for the long term.

By the numbers: Retail sales in the U.S. are expected to reach about $1.3 trillion for the period from November to January, Deloitte says.

• The firm estimates that e-commerce sales specifically will reach between $210 billion and $218 billion. 
• For context, total holiday sales last year grew 5.8% from 2019 to $1.2 trillion — with e-commerce specifically growing 34.8% to $189 billion.

The strong sales forecast comes amid “already elevated retail sales” even as disposable income is expected to remain flat, Deloitte says. 

• The National Retail Federation raised its annual outlook earlier this year after observing that consumer spending has been "more resilient" than expected.

What they’re saying: During a Goldman Sachs presentation last week, Walmart CEO Doug McMillon also said he expects consumer demand to stay the same or rise this year.

• “If I had to take over or under, I'll take a little over,” McMillon said. “I think customers, families want to celebrate Christmas. They want to have a Thanksgiving, and if this situation with the virus enables it or maybe even if it doesn't, we're going to see strong demand through the rest of this year.”