Tech Stocks Mask Broad S&P 500 Weakness Below Record Highs
84% of S&P 500 constituent stocks are trading at least 10% below their all-time highs, according to analysis from The Kobeissi Letter. This broad weakness is being masked by the strong performance of high-profile technology names, including Nvidia and Micron, which have helped keep the overall index near record levels. The Real Estate sector shows the most significant pullback, with 97% of its stocks down at least 10% from their peaks. Materials follow at 96%, Utilities at 94%, and Consumer Discretionary at 92%. Strategists at The Kobeissi Letter noted that a few specific names are currently carrying the entire stock market. The pressure in these sectors likely reflects concerns about earnings from companies exposed to high interest rates, particularly in housing and retail. Energy has held up relatively better, with 62% of its stocks more than 10% below their highs, followed by Healthcare at 70% and Information Technology at 72%. Deeper declines are also evident: 59% of S&P 500 stocks are down at least 20% from their highs, 41% are down more than 30%, and 17% are off by more than 50%. Despite this underlying drawdown, the market is approaching a milestone. Truist co-chief investment officer Keith Lerner states that the current bull market is on track to become the seventh to complete at least four full years on Oct. 12. This would be the 11th bull market since the 1950s. The current advance stands at 119%, which sits near the middle of the pack when measured against every bull market dating back to the 1950s. This gain trails the 401% rise recorded in the cycle spanning 2009 to 2020 and the 582% climb seen between 1987 and 2000. In Lerner's measurement period, the historical average advance for a bull market is 184%. Of the 10 prior bull markets, six lasted longer than four years.
84% of S&P 500 constituent stocks are trading at least 10% below their all-time highs, according to analysis from The Kobeissi Letter. This broad weakness is being masked by the strong performance of high-profile technology names, including Nvidia and Micron, which have helped keep the overall index near record levels. The Real Estate sector shows the most significant pullback, with 97% of its stocks down at least 10% from their peaks. Materials follow at 96%, Utilities at 94%, and Consumer Discretionary at 92%. Strategists at The Kobeissi Letter noted that a few specific names are currently carrying the entire stock market. The pressure in these sectors likely reflects concerns about earnings from companies exposed to high interest rates, particularly in housing and retail. Energy has held up relatively better, with 62% of its stocks more than 10% below their highs, followed by Healthcare at 70% and Information Technology at 72%. Deeper declines are also evident: 59% of S&P 500 stocks are down at least 20% from their highs, 41% are down more than 30%, and 17% are off by more than 50%. Despite this underlying drawdown, the market is approaching a milestone. Truist co-chief investment officer Keith Lerner states that the current bull market is on track to become the seventh to complete at least four full years on Oct. 12. This would be the 11th bull market since the 1950s. The current advance stands at 119%, which sits near the middle of the pack when measured against every bull market dating back to the 1950s. This gain trails the 401% rise recorded in the cycle spanning 2009 to 2020 and the 582% climb seen between 1987 and 2000. In Lerner's measurement period, the historical average advance for a bull market is 184%. Of the 10 prior bull markets, six lasted longer than four years.