“I think that a lot of these stocks have just gotten extraordinarily overbought, and they’ve gone to the stratosphere.” – 03:37
Mark Newton, Managing Director of Fundstrat Global Advisors, joins Remy Blaire at the New York Stock Exchange to discuss the current state of the stock market. Despite the S&P 500 and Nasdaq Composite reaching record highs, we discuss the broader market’s struggle to gain meaningful traction over the past month. Mark highlights that while the S&P equal-weighted index and the Dow are near their highs, they have yet to confirm a breakout, indicating a potential lack of momentum.
The pair explore the implications of defensive sectors, such as consumer staples and utilities, gaining ground, which historically can signal a market correction. Mark points out that market breadth has been declining since mid-July, with parts of the tech sector showing signs of weakness. He emphasizes the importance of selectivity in investment strategies moving forward, especially as we approach seasonal weakness.
Mark provides insights into the current sentiment in the market, noting that despite a significant rally of about 32% since April, bullish sentiment remains subdued. He suggests that this lack of speculation could mean that any potential pullback in the market may be short-lived, and he maintains a bullish outlook for the remainder of the year, albeit with some expected volatility in the near term.
Lastly, Mark expresses optimism for the market’s trajectory, citing the deflationary impact of AI and the potential for rate cuts to support economic growth.