Introducing Extreme Investor Network’s latest blog post: “Market Rally: More Than Just Meme Stocks”
Meme stocks have been all the rage lately, with GameStop making headlines for its impressive rally. However, the market as a whole is experiencing a broad rally that is lifting up sectors that have been lagging behind this year. According to Marko Kolanovic at JP Morgan, the recent market momentum can be attributed to a “soft landing narrative” following softer US jobs data and dovish guidance from major central banks.
The evidence of this broad rally is clear in the market indicators – the S&P 500 advance/decline line is near new highs, the S&P 600 Small Cap advance/decline is at its highest level since December, and the S&P Mid Cap 400 advance/decline line has hit a new high. This indicates a widespread market advance that is lifting up sectors that have underperformed so far this year.
For example, on Monday, some of the biggest gainers were actually among the biggest losers year-to-date. Stocks like Intel, Tesla, and CVS, which have been struggling, saw significant gains. Even EV-related stocks that have had a tough year, like Plug Power and Fisker, rallied on Monday.
Additionally, speculative tech stocks, including those associated with Cathie Wood’s ARK Innovation fund, also saw a boost. It seems that the market rally is lifting up a lot of previously downtrodden sectors and stocks.
The “sell in May” strategy, which predicts a decline in the market during the summer months, has not played out as expected. Instead, the market has continued its upward trajectory, with the S&P 500 up 3.6% in May and nearing historic highs. The CBOE Volatility Index (VIX) closed at its lowest level of the year, indicating a sense of calm in the market.
So, while meme stocks may be getting the spotlight, the broader market is experiencing a significant rally that is benefitting a wide range of sectors and stocks. Stay tuned to Extreme Investor Network for more insights and analysis on the dynamic world of trading and investing.