Goldman Sach’s opined “This Time is different,” explaining the unrelenting advance in the indices, fueled by a small group of supercharged technology stocks. Such statements are normally the kiss of death for it is never different, there are just different people.
Bloomberg writes today’s market breadth is the worst since the dot-com era. Only 28% of S & P 500 members are outperforming the benchmark itself—so 72% are holding performance back. “This type of concentration in performance is at a level not seen since 2000” writes Bloomberg.
APPL and MSFT both have capitalizations around $3 trillion. To place this value into perspective, the capitalization of AAPL or MSFT is about the same as France’s GDP which is the seventh largest economy in the world. NVDA is worth more than entire capitalization of the Chinese market.
It is often stated that markets can remain irrational one more day that one can remain sane or solvent. Today shall too change but the question is when and what will be the catalyst.
Perhaps the catalyst could be monetary policy. Yesterday Atlanta Fed President Raphael Bostic expects the first interest rate cut to occur sometime in the third quarter and then the Fed will pause to assess how the policy shift is affecting the economy. Bostic further stated, “I would probably not anticipate back-to-back interest rate cuts.”
Will FRB Chair Chairman Powell echo similar remarks tomorrow and Thursday during his semi-annual congressional testimony about the state of the economy?
Today, several significant economic indicators are released including the JOLTS Job openings, the ISM Services Inex and durable goods. How will the statistics influence outlooks.
Last night the foreign markets were down. London was down 0.01%, Paris down 0.02% and Frankfurt down 0.1%. China was up 0.28%, Japan down 0.03% and Hang Seng down 2.61%.
Dow and NASDAQ futures are flat and down 0.50%, respectively. The 10-year is up 7/32 to yield 4.19%.
