U.S. equities are being pushed along by the fewest stocks in more than 15 years,<\/strong> which as Bloomberg reports,<\/a> is a sign of fatigue in a bull market <\/strong>that already rivals anything since World War II in duration.<\/p>\n More than 100 percent of this year\u2019s increase in the Standard & Poor\u2019s 500 Index is attributable to two sectors, health-care and retail. That\u2019s the tightest clustering for an advancing year since at least 2000, data compiled by Bloomberg show.<\/p>\n <\/p>\n Breadth has fallen apart in a rally that is now the third longest since 1940, leaving investors exposed after three years without a 10 percent correction. Adding to concerns: the two industries shouldering this year\u2019s advance trade at more than 22 times annual earnings<\/u> — a 20 percent premium to everything else.<\/strong><\/p>\n <\/p>\n \u201cYou\u2019ve gone from a market which lives or dies by people\u2019s feelings about the macro environment to a market that\u2019s going to live or die according to the bottom-up beliefs of the prospect of a limited number of individual issues,\u201d said Michael Shaoul, chief executive officer at New York-based Marketfield Asset Management, which oversees $5 billion.<\/p>\n <\/p>\n Reliance on fewer and fewer companies has been a hallmark of maturing bull markets, most memorably the Internet bubble when six computer and software companies accounted for 55 percent of the S&P 500\u2019s gain over the 12 months leading up to the peak.<\/strong><\/p><\/blockquote>\n This is so damningly exposed in the following chart showing the impact of the largest few stocks relative to the rest… and now we are seeing that correcting…<\/p>\n <\/p>\n But it gets worse, as The Wall Street Journal reports<\/a>, just a few companies are driving the gains in major U.S. stock indexes this year, raising fresh concerns about the health of the market\u2019s advance.<\/p>\n Six firms\u2014 Amazon.com Inc., Google Inc., Apple Inc., Facebook Inc., Netflix Inc. and Gilead Sciences Inc.\u2014now account for more than half of the $664 billion in value added this year to the Nasdaq Composite Index,<\/strong> according to data compiled by brokerage firm JonesTrading.<\/p>\n <\/p>\n Amazon, Google, Apple, Facebook, Gilead and Walt Disney Co. account for more than all of the $199 billion in market-capitalization gains in the S&P 500.<\/u><\/strong><\/p>\n <\/p>\n <\/p>\n The concentrated gains are spurring concerns that soft trading in much of the market could presage a pullback in the indexes. Many investors see echoes of prior market tops\u2014including the 2007 peak and the late 1990s frenzy\u2014when fewer and fewer stocks lifted the broader market. The S&P 500 is up 1% this year while the Nasdaq has gained 7.4%.<\/p>\n <\/p>\n Other indicators are also flashing yellow<\/strong>. In the Nasdaq, falling stocks have outnumbered rising stocks this year, sending the \u201cadvance-decline line\u201d into negative territory, a phenomenon that has come before market downturns in the past, investors and analysts said.<\/p><\/blockquote>\n Bad breadth is everywhere in US equity markets…<\/strong><\/em><\/p>\n Charts: Bloomberg<\/p>\n","protected":false},"excerpt":{"rendered":" The Stock Market’s Ugly Truth – Only 6 Stocks Matter ZeroHedge.com When we first exposed the shockingly dire lack of breadth in US equity markets, it was shrugged off by the mainstream media as yet another ‘worry’ in the wall … Continue reading \n
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