9.2 C
New York
Thursday, March 28, 2024

There’s a Bear Growling in this Bull Market

Courtesy of Pam Martens.

Growling Bear Drawing

Last Friday, the Dow Jones Industrial Average closed down a mere 61.49 points or 0.36 percent, but the overall market breadth (number of stocks advancing versus those declining) was abysmal. At the New York Stock Exchange, there were 666 stocks advancing versus 2,515 declining. Nasdaq showed 893 advancers versus 1,834 decliners.

Equally troubling for those who have jumped into stocks with both feet, Bloomberg News has a heart-stopper headline out today: “Record S&P 500 Masks 47% of Nasdaq Mired in Bear Market.” The article, by Lu Wang and Joseph Ciolli, advises that:

“Beneath the U.S. Stock market’s record-setting gains, trouble is stirring. About 47 percent of stocks in the Nasdaq Composite (CCMP) Index are down at least 20 percent from their peak in the last 12 months while more than 40 percent have fallen that much in the Russell 2000 Index and the Bloomberg IPO Index.”

This is not atypical of a tired bull facing serious headwinds. As the authors note, today’s market does not look all that different from the last market peak: “At the last market peak, losses across small-cap stocks, IPOs and technology companies were as widespread as they are today. About 45 percent of the shares were down at least 20 percent from a 52-week high in October 2007…”

A bull market with real legs should be lifting more boats. But despite the Standard and Poor’s 500 stock index setting new highs 33 times this year, the Bloomberg writers note that the Russell 2000 Index has delivered a negative return of 0.3 percent this year.

To put the whole matter in sharp perspective, what we actually have is a big cap bull market and a broad market rowing frantically against a rip tide. But as we know well from past Fed-fueled bubbles, things can get a lot frothier before the bubble pops.

Continue Here

 

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments

Stay Connected

157,451FansLike
396,312FollowersFollow
2,280SubscribersSubscribe

Latest Articles

0
Would love your thoughts, please comment.x
()
x