The main US stock benchmarks have reached an all-time high this week, but other stock returns will peak earlier this year as some analysts have begun to worry about market breadth.
Geometric index of the value line
an equally weighted price measure — about 1,700 shares traded on U.S. markets, closed at a record 685 on June 8 and has traded below the 50-day moving average for most of that month, according to FactSet data. The index closed Wednesday at almost 662, not far from its peak, but still 3% lower, the data show.
The Value Line index has more holdings than the S&P 500
A popular measure of the US stock market that monitors large corporations and is significantly open to information technology, said Frank Cappeller, an strategist at Instinet’s desktop. Cappeller said the rise in shares of smaller companies could help raise the Value Line index, adding that cyclical and growth inputs has in the meantime supported the main benchmarks.
He said he had been closely following the “performance of the show”.
“The spin has come and saved the S&P 500 every time,” Cappeller said. “How big a cap we breathe, can we see the rotation back to previous poorly functioning areas?”
Investors have shown a willingness to buy the US stock market down, despite some concerns about protracted valuations and market uncertainty. S&P 500, Nasdaq Composite
and the Dow Jones Industrial Average
indexes everything closed at a record high on July 26, adding new spikes to the long peak this year and trading on Thursday afternoon.
Meanwhile, Citigroup analysts said in a study earlier this month that the share of S&P 500 companies that “firmly” exceeded the stock market benchmark saw a sharp decline in the second quarter. And the Wells Fargo Investment Institute said in a June 30 report that “a market breadth survey shows that stocks that carry key indices have reached record levels over the past three months.
The S&P 500 is very heavy.
Five technology giants – Apple Inc.
and Facebook Inc.
– accounted for about 23% of the market capitalization weighted index at the end of last week, MarketWatch sister edition Barron announced July 26.
Meanwhile, Value Line covers about 90% of the value of the entire US stock market product guide on your website. Although Instetin Cappeller said it did not follow exactly the geometric index of equal weight values, it referred to the Invesco S&P 500 Equal Weight ETF
whose performance has been “flat” in the last three months.
Nevertheless, the Invesco S&P 500 Equal Weight ETF traded around record levels on Thursday afternoon, according to FactSet data.
In the world of small-cap stocks, the Russell 2000 index
is below its March peak, according to FactSet. The index has been in trouble this month, with the small business index falling so far by about 2.8% in July, based on Thursday afternoon trading, according to FactSet data.
The rise in US equities is “skeptical about sustainability”, in part due to concerns about the lack of market breadth, Katl Stockton, founder of Fairlead Strategies, said in an interview. However, in its technical analysis, Stockton does not see “big sales signals” or “big signs of upward exhaustion” in large technologies.
US stocks have grown significantly in 2021.
The S&P 500 has risen nearly 18% this year, according to Thursday afternoon trading, FactSet reports. Russell 1000 growth
and Russell 1000 value
the indices have each risen by about 17% this year, according to FactSet data, with the current volume being about equal.