“Goldman Says Narrow Breadth in S&P 500 a Bad Sign for Stocks”

“The narrowing group of winners in the S&P 500 doesn’t bode well for the future performance of U.S. stocks, according to Goldman Sachs Group Inc.

The U.S. benchmark is around 17% below its February record, but the median stock trades 28% from its peak, Goldman strategists including David Kostin wrote in a note Friday. Meanwhile, the five largest companies make up 20% of the gauge’s market capitalization, exceeding the 18% level the measure reached in March 2000 and raising investor concerns about narrow market breadth, they said.

“Sharp declines in market breadth in the past have often signaled large market drawdowns,” the strategists wrote. “Narrow breadth can last for extended periods, but past episodes have signaled below-average market returns and eventual momentum reversals.”…”

https://finance.yahoo.com/news/goldman-says-narrow-breadth-p-233303015.html