The 3-day return spread between the S&P 500 and the equal-weight S&P 500 has fallen to one of the widest negative readings on record.
This means the S&P 500 index is surging while the average stock is being left behind.
For instance, last Friday's all-time high was driven almost entirely by Nvidia, Microsoft, and Amazon, with ONLY 36% of S&P 500 stocks closing higher on the day.
As a reminder, the equal-weight S&P 500 strips out the dominance of mega-cap stocks and gives every company the same weight, making it a cleaner measure of how the average stock is actually performing.
When the gap between the two is this wide, it signals that the rally is being driven by a handful of giants rather than broad market strength, a warning sign historically.
This is not a healthy market.
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Posted by —–Marcel—–
4 Comments
How far is the equal weight off all time high?
Historically this isn’t unusual
Wait, you’re telling me the largest companies have the largest impact? Color me surprised.
Don’t worry next quarter is gonna be Hella bullish. For example GM just got 500 million back in tariffs. And the only way the customers can get her back by reaching out to GM and possibly even fighting a lawsuit cause you know they’re not gonna hand it over without a fight