The Best Thing I Read This Weekend

The S&P 500's YTD gains have been heavily concentrated in AI-related TMT stocks (87% of returns), but this narrow breadth is justified by significant upward revisions in earnings estimates.

Key Takeaways

• 1.The AI theme (TMT) dominated S&P 500 returns YTD, accounting for 87% of the rally.
• 2.While market breadth is narrow, historical data suggests this is not necessarily a bearish indicator for the end of a bull market.
• 3.The equity momentum factor is currently stretched, typically signaling a decline in the following two to three months after a peak.

Table of Contents

• Editorialized executive summary
• Check-down of the note's most salient points and some illustrations

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