Stock Market Internals Earnings Momentum, Small/Mid/Large Caps, Growth/Value/Cyclicals, and Additional Factors
In August, the S&P 500 notched its fifth consecutive monthly gain with the five largest firms accounting for nearly half of its 7% advance. Those companies are now within spitting distance of comprising 25% of the index—that’s a doubling of market cap for the five largest firms in just under three years.
With the S&P 500 now within spitting distance of breaking even year-to-date, we seem to be witnessing an illusion worthy of David Copperfield. From the market’s perspective, the problems that were very much right in front of us during the limit down days of March seemed to have vanished into thin air.
April was a month of plummeting payrolls, eviscerated earnings, and crashing commodities—some of the worst data since the 1930s. It was also the best month of performance for the S&P 500 since January 1987 and it helped lower the YTD loss to the single digits. The punishment, it would seem, doesn’t fit the crime.