Société Générale on US stocks – point to broadening profit cycle, improving breadth

A snippet from Société Générale on US equites, looking favourably at the broadening rally:

• equal-weighted S&P 500 had its biggest one-day outperformance versus its market cap-weighted counterpart since Nov 2020 last week

SocGen says this is a boost of confidence for stocks, comparing narrow with broader breadth:

• narrow breadth often occurs in a bear market or when a few concentrated stocks drive the market into a ‘bubble.’
• we now think improving breadth should be the way for the S&P 500, rather than a recession or concentrated positioning, as our cycle indicators continue to rise over the last five quarters and the profit cycle is broadening beyond Nasdaq-100 stocks

This article was written by Eamonn Sheridan at www.forexlive.com.