US Stocks Hit New Highs, but Gains Driven Solely by Chip Surge
US stocks have hit new highs, but the rally is being driven by a very small number of stocks, reminding Wall Street of the period before the burst of the Dotcom Bubble. Although leading stocks such as Micron Tech have posted substantial gains, the narrow market breadth remains a concern for investors and analysts. Ben Snider, Chief US Equity Strategist at Goldman Sachs, pointed out that while the S&P 500 Index is at historic highs, the median stock remains about 13% below its respective peak, marking one of the widest gaps in nearly 25 years and sounding an alarm for the market
Although US stocks hit new highs overnight, the number of stocks driving the record-breaking rally was so small that some on Wall Street were reminded of the situation before the burst of the Dotcom Bubble.
While this comparison may not be entirely apt at present, the narrow market breadth continues to worry many investors and analysts, especially given the huge profits booked by leading stocks such as Micron Tech.
Among them is Ben Snider, Chief US Equity Strategist at Goldman Sachs Group:
"If you look at the S&P 500 Index, we are at historic highs, but the median stock in the index is still about 13% below its respective peak.
"This is one of the largest gaps we have seen in nearly 25 years. It truly sounds an alarm for the market."
