So far in 2024, the S&P 500 Index has hit 17 consecutive record closing highs. Such a strong rise is shocking, but some market observers are not optimistic about the situation under the surface of this rise. Economist David Rosenberg, founder and president of Rosenberg Research, focuses on three divergences.
Updated March 14, 2024 12:10 CST
So far in 2024, the S&P 500 Index has hit 17 consecutive record closing highs. Such a strong rise is shocking, but some market observers are not optimistic about the situation under the surface of this rise.
Economist David Rosenberg, founder and president of Rosenberg Research, said in a report on Wednesday, “We continue to note that the recent momentum is likely to continue in the near term, but increasing uncertainty will begin. Triggering some danger warnings, one can’t help but wonder how much room there is for the stock market to rise further?
In other words, while the indexes are surging, the rest of the market is doing little to inspire confidence in the rally’s ability to continue.
Rosenberg focused on three divergences:
…
So far in 2024, the S&P 500 Index has hit 17 consecutive record closing highs. Such a strong rise is shocking, but some market observers are not optimistic about the situation under the surface of this rise.
Economist David Rosenberg, founder and president of Rosenberg Research, said in a report on Wednesday, “We continue to note that the recent momentum is likely to continue in the near term, but increasing uncertainty will begin. Triggering some danger warnings, one can’t help but wonder how much room there is for the stock market to rise further?
In other words, while the indexes are surging, the rest of the market is doing little to inspire confidence in the rally’s ability to continue.
Rosenberg focused on three divergences:
Dow Jones Indexes and Dow Jones Transportation Indexes
The Dow Jones Industrial Average has set multiple records in 2024, but the Dow Jones Transportation Average has been “exhibiting uncertainty.”
The Dow Theory is a long-standing technical analysis doctrine that states that if one stock market average rises above a key level and another index rises above a key level, that means A larger uptrend is likely forming.
Rosenberg wrote that the Dow Jones Transportation Average has been underperforming since last summer, and the longer the Dow Jones Industrial Average’s moves are not confirmed by the Dow Jones Transportation Average, “the greater the danger to the Dow.” big”.
High-yield bonds and high-volatility stocks
Rosenberg said high-yield bonds, also known as junk bonds, were expected to outperform other assets except long-dated Treasuries if excited investors chased riskier assets, but that didn’t happen.
The same is true between “high-beta” stocks – stocks that are more volatile than the market as a whole – and those with lower volatility, he said.
Tech stocks gain momentum
Rosenberg said that while a surge in shares of Nvidia Corp. (NVDA), a major beneficiary of artificial intelligence (AI), helped push the S&P 500 to a record closing high on Wednesday and drove a surge in the Nasdaq Composite Index, technology The rally led by stocks is showing signs of weakness.
He said the relative ratio of the S&P 500’s technology sector to the overall S&P 500 failed to confirm the S&P 500’s move to new highs.
“These stocks, which were previously the most important to the market, no longer appear to be market leaders,” he wrote.
Rosenberg warned that, taken together, the longer multiple indicators fail to confirm the overall rise in stock prices, the more fragile the moving average will be and the higher the risk of a reversal.
(This article is translated from MarketWatch. MarketWatch is operated by Dow Jones, the parent company of The Wall Street Journal, but MarketWatch is independent from Dow Jones Newswires and The Wall Street Journal.)
2024-03-14 04:10:00
#warning #signs #raise #questions #room #U.S #stocks #rise
