Is the bull market broadening or rotating? Yardeni Research answers

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Is the bull market broadening or rotating? Yardeni Research answers

Investors are debating whether the recent outperformance of the S&P 400 MidCaps and S&P 600 SmallCaps – collectively known as the"SMidCaps" – along with the equal-weighted S&P 500, points to a sustainable broadening of the bull market beyond the largest-cap stocks.

“The problem might be that the most successful SMidCap companies get acquired quickly these days before they can significantly boost the earnings/revenues/margins of SMidCap stock price indexes,” the research firm’s analysts added.:’ As economic growth extends to the manufacturing and construction sectors, stock market breadth should improve, explained analysts. The Atlanta Fed's GDPNow model recently revised its estimate for Q2 real GDP growth to 2.7%, up from 2.5%.

:’ Lastly, analysts highlighted geopolitical developments as one of the biggest risks to the current bull market. These developments led to a sell-off in chip stocks, sending the iShares Semiconductor ETF tumbling more than 7% on Thursday.Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events.

 

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