Cause For Some Momentum Sobriety

Goldman Sachs analysis indicates that while the S&P 500 rally is exceptionally narrow and driven by TMT momentum, it is currently supported by robust earnings growth unlike past bubbles.

Key Takeaways

• 1.The S&P 500 rally is heavily dominated by TMT names (Tech, Communication Services, AMZN, TSLA), accounting for 87% of YTD returns.
• 2.Market breadth has narrowed to its tightest level in decades, increasing drawdown risk, though not necessarily signaling an immediate end to the bull market.
• 3.Unlike previous momentum peaks, the current rally is justified by significant upward revisions in earnings estimates, specifically in AI-related infrastructure and Energy.

Table of Contents

• Executive Summary
• Check-down of Salient Points
• Visual Illustrations and Tables
• Narrow Breadth Analysis
• Momentum Persistence and Historical Context
• Broader Market and Earnings Implications

Document Preview

Page 1 of 5

Subscribe for full accessStart Free Trial