1.Market Breadth is Declining.
SPDR BLOG
When market gains are being driven by a few stocks, it means the market’s breadth—the number of stocks moving higher in tandem—is narrowing. This not only indicates that a rally may be somewhat unsustainable, but it may also indicate a challenging time for active managers. When only a few securities lead the charge, it limits the power of individual stock pickers.
As shown above, the market keeps setting new highs while the number of stocks surging ahead (measured by the number of S&P 500 stocks trading above their 200-day moving average) is falling. This could signal rocky days ahead for a stock market looking to move higher
Source: Bloomberg Finance L.P., as of 5/31/2017.
Past performance is not a guarantee of future results. Index returns are unmanaged and do not reflect the deduction of any fees or expenses.
