Tuesday, 29 May 2018 08:19

A Summer Storm is Coming for Stocks

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(New York)

Investors beware, US stocks may be in for a real summer storm. On the surface things have been looking better. Despite a week in which many geopolitical events went wrong (e.g. trade war, Trump and North Korea, Italian bonds/government), the markets stayed strong. However, underneath the positive surface, there is some real bearishness. The average stock in the S&P 500 is underperforming the market as a whole by almost a whole percent. The S&P 500 is up 3% this year, but the average stock has gained just 2.1%, showing that market breadth has narrowed.


FINSUM: We do not think the current market breadth figures show much of anything, but then again, we are more concerned about the overall economy than the signals the market is sending.

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