Rates Remain the Bogeyman: Market Breadth and DotCom Parallels

Goldman Sachs warns that extreme momentum and narrow market breadth haven't been seen at these levels since the 2000 DotCom peak, leaving the market vulnerable to rising interest rates.

Key Takeaways

• 1.Market breadth is severely deteriorating, with more stocks hitting new 52-week lows than highs despite the S&P 500 reaching new peaks.
• 2.Risk appetite and equity momentum have reached extreme levels (RAI > 1.0, Momentum z-score > 3.0) for the first time since the peak of the DotCom bubble in 2000.
• 3.Long-term bond yields above 5% are acting as a major headwind, reflecting fiscal stress and sticky inflation, while JGB yields are also weighing on global equities.

Table of Contents

• Breadth
• Inflation
• Out of Tokens
• Risk/Technicals

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