economy
The stock market just did something eerily similar to the dot-com bubble top in 2000
Surging stock performance in May was concentrated in the AI adjacent.
TL;DR
- The S&P 500 closed at a record, but only a few stocks, mainly AI-related, hit their own all-time highs.
- This concentration of gains in a handful of stocks is similar to what occurred at the peak of the dot-com bubble in March 2000.
- Semiconductor stocks, particularly memory chip makers like Micron, AMD, Samsung, and SK Hynix, fueled the May stock boom.
- Strategists are concerned that a bull market that doesn't broaden out is unsustainable.
- Advance-decline lines and the percentage of S&P 500 constituents trading above their 200-day moving average show signs of lagging, indicating poor market breadth.
- Michael Hartnett of Bank of America advises clients to adopt a defensive posture and consider long bonds and underperforming sectors for a post-bubble roadmap.