Everything Is Working

“But it’s being led by just five stocks.”

This was the narrative as the market was bouncing in March and April and even into May. That narrative wasn’t necessarily wrong at the time, and yes, I was a part of the chorus, but that narrative no longer reflects reality.

It’s not just the Apples and the Amazons of the world that are dragging the market higher. Everything is working. Nearly 90% of stocks in the S&P 500 are above their 200-day moving average, which is the highest reading since the summer of 2014.

The average stock in the S&P 500 is 91% higher than its 52-week low (median 81%).

Gap, MGM, Freeport-McMoRan, L Brands, Darden, and Etsy have all quadrupled.

Among the names that have tripled are Royal Caribbean, Halliburton, FedEx, Live Nation, and Chipotle.

Another nearly 200 names have doubled since the low.

News of the vaccine propelled stocks to an all-time high, and investors did what they always do. They reacted. ETFs saw their strongest flight from relative safety and into equities since January of 2017.

Does the excitement that we see after such a strong move matter? Should this give investors pause? Josh and I got into all of this and more on this week’s What Are Your Thoughts?

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