Young woman sitting in the office at the table with a laptop, using the phone and looking worriedly at the camera, raising her hands in frustration

Confusion reigns.

The US stock market is going up despite so many stocks going down

A prelude to more drama?

6/17/24 1:05PM

Everyone and their mother is – or should be – talking about low breadth in the US stock market.

Whether it’s Nvidia breaking away from its peers, or the unprecedented divergence between the equal-weighted and market-cap versions of the S&P 500, the price action over the past month has been remarkable and unique.

We haven’t had a four-week span where the US stock market has gone up so much with so many stocks within the market going down, based on data going back to 2002.

(The S&P 500 cumulative advance-decline line is the running total of the number of stocks that rise versus fall each day).

The cumulative advance decline line is down by over 1000 during a period in which the S&P 500 rose 2.4%. There really isn’t anything close in the past 20+ years – not even if you chop each of these moves in half.

History isn’t really instructive in navigating these waters. There’s an inherent tendency to think that gaps like these must resolve themselves: either by megacaps correcting downward, or by the rest of the index zooming higher while those names take a breather.

But even though investors haven’t faced a market particularly like this, its closest cousin (still a distant relative) happened just last May, when the S&P 500 rose 0.9% in a four-week span while the cumulative A/D line contracted by nearly 1000.

The “why” and “how” looks similar now to then, in broad strokes.

Nvidia effectively kicked off the AI boom in May 2023, and more recently has reaffirmed this as a catalyst for continued eye-popping operating performance. Meanwhile, the Citi US economic surprise index, which measures the extent to which incoming data are exceeding or falling short of economists’ expectations, dipped into negative territory in mid-May 2023. It has dropped sharply over the past two months and is now at -20.

During that four-week span ending May 26, 2023, the S&P 500 outperformed its equal-weight counterpart by nearly 4%. And the gap didn’t really close – not violently, at least. The equal-weight S&P just rose a little more than the market-cap version over the next four and eight weeks.

Two things that are still true of the investment landscape: profit growth is still expected to be hyper-concentrated in the mega-caps (at least for the next couple quarters). And there’s little worry that the US economy is falling off a cliff; 2024 GDP growth estimates have been stable at 2.4% for the past six weeks.

If both those continue to hold, the dramatic divergence we’ve witnessed in the past month need not end with a bang. Just because we’re in uncharted waters doesn’t mean we’re heading for a waterfall. It could end up being a lazy river.

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Luke Kawa21m

The no-fundamentals, high-volatility winning trades are reversing hard

The volatile, speculative momentum trades that have been on fire in recent months are getting smoked.

The SPDR Gold Shares ETF is on track for its biggest daily loss since April 2013, as of 10:28 a.m. ET.

And Goldman Sachs’ baskets of “high beta momentum longs” and “non-profitable tech” stocks, which have pretty much been the exact same line for two months, got dumped last Thursday and are down big again today.

D-Wave Quantum, Planet Labs, and Navitas Semiconductor are some of the stocks that feature in both of Goldman’s baskets and are down more than 2% as of 10:24 a.m. ET.

All of these groups have been handily outperforming the S&P 500 for an extended period of time despite by their very nature having more hype than actual track records — in terms of producing profits for shareholders — to speak of. Gold, obviously, generates no income. Nonprofitable tech stocks aren’t really in a position to spin off cash they don’t have to their owners. And, as mentioned, high-beta momentum and nonprofitable tech stocks have pretty much traded the same!

It’s difficult to pinpoint a fundamental catalyst for why speculative momentum trades suddenly turn on a dime, just as it’s often tricky to identify why they went on such a mammoth run in the first place. Perhaps the onset of earnings season — which gives us the opportunity to assess fundamental progress — means that right now, there’s more attention being paid to “line go up” when it comes to revenues and profits, and that’s taking away from the mindshare on “line go up” with respect to recent share price performance.

Matt Phillips55m

Gold slumps, GLD and miners take lumps

The record-breaking rise in gold stalled Tuesday, with prices tumbling nearly 4%.

The sudden downdraft hammered popular plays on the price such as the SPDR Gold Shares ETF, the largest gold ETF, and miners like Newmont Corp., Agnico Eagle, Wheaton Precious Metals, and Anglogold Ashanti.

While there’s no clear reason for the slump, theories and contributing factors may include:

Social media chatter about gold — which coincided with a spike in options activity — cooling off considerably, according to data provided by SwaggyStocks.
Less safe haven demand now amid a seeming reduction in China-US tensions.
A seasonal drop in demand out of India — the world’s second-largest gold market after China — that typically follows Diwali.
Jitters about the fact that weekly CFTC positioning data on the futures market, one of the best sources of hard data on the gold market, continues to be unavailable as a result of the US government shutdown.

But even after today’s slump, gold prices, as measured by New York futures prices, are up about 60% in 2025.

Gold Slumps Most in Four Years as Record-Breaking Rally Cools

While there’s no clear reason for the slump, theories and contributing factors may include:

Social media chatter about gold — which coincided with a spike in options activity — cooling off considerably, according to data provided by SwaggyStocks.
Less safe haven demand now amid a seeming reduction in China-US tensions.
A seasonal drop in demand out of India — the world’s second-largest gold market after China — that typically follows Diwali.
Jitters about the fact that weekly CFTC positioning data on the futures market, one of the best sources of hard data on the gold market, continues to be unavailable as a result of the US government shutdown.

But even after today’s slump, gold prices, as measured by New York futures prices, are up about 60% in 2025.

Max Knoblauch1h

Warner Bros. Discovery spikes after it says it’s gotten takeover interest from multiple parties

With a name like Warner Bros. Discovery, you wouldn’t expect WBD to be particularly anti-consolidation. As it fields interest from Paramount Skydance, the company said Tuesday it’s open to a sale.

Paramount Skydance isn’t the only party that’s interested, according to WBD. Shares of the HBO and CNN parent climbed 11% shortly after markets opened.

“It’s no surprise that the significant value of our portfolio is receiving increased recognition by others in the market. After receiving interest from multiple parties, we have initiated a comprehensive review of strategic alternatives to identify the best path forward to unlock the full value of our assets,” CEO David Zaslav said in a statement.

In June, Warner Bros. Discovery announced its plans to split into two separate publicly traded companies, unlinking its streaming and film studios business from its cable TV networks.

Warner Bros. Discovery Initiates Review of Potential Alternatives to Maximize Shareholder Value

In June, Warner Bros. Discovery announced its plans to split into two separate publicly traded companies, unlinking its streaming and film studios business from its cable TV networks.

Luke Kawa3h

Beyond Meat’s meme stock rally continues after Monday’s frenzied session broke its records for volumes, options traded, and one-day gains

Beyond Meat is showing what happens when a low nominal share price, retail enthusiasm, heavy options activity, and relatively elevated short interest collide: this is what a meme stock rally looks like.

Shares of the plant-based meat company are on a tear again on Tuesday morning, pushing toward the $2 level after sinking as low as $0.50 last Thursday. As of 7:39 a.m. ET, more than $115 million has changed hands trading Beyond Meat, the fourth-most of any stock listed on US exchanges.

The rally didn’t need any fundamental news, but it got some anyways: management announced plans to expand its product availability at over 2,000 Walmart locations nationwide, further adding to the stock’s early gains.

This continues Beyond Meat’s high-volume surge that saw the stock more than double on Monday, in what was by far its biggest one-day gain on record. By the time the dust settled on the opening session of the week, Beyond Meat had volumes in excess of 1.2 billion, effectively turning over its (newly boosted) shares outstanding three times over during the course of the day. That’s a higher level of turnover than Opendoor Technologies enjoyed during its most insane session of this year back on July 21.

JPMorgan strategist Arun Jain observed that this retail interest came out of nowhere as the stock was trading for coins rather than dollars, as this chart on BYND’s daily net retail imbalance through Friday shows:

JPM BYND net imbalance — Source: JPMorgan

This sudden flood of positive retail sentiment appears to be in no small part thanks to a (since banned) Reddit user with the handle capybaraSTOCKS, who has since transitioned to YouTube and X to share his thesis on the company. Business Insider identified this person as Dimitri Semenikhin, a Dubai-based real estate developer.

The move on Monday included a massive spike in call volumes up to more than triple their previous daily record:

When you’re a meme stock, your equity is what becomes your top product. And while, yes, most companies do tend to see higher trading volumes on any given day than the sales they’re making, this discrepancy is particularly stark with Beyond Meat. Through its history as a publicly traded company, it’s recorded plant-based meat sales of 487.5 million pounds. In other words: more than twice as many shares traded on Monday compared to pounds sold from Q1 2018 through Q2 2025!

J. Edward Moreno

Philip Morris sinks on signs of cracks in Zyn biz, despite cheery earnings report

Investors are worried Zyn sales may have hit their peak.

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