Is the stock market's runway running out?

Market Overview
Read time 1.1 minutes

Year To Date Performances:

1. China has slashed stock trading tax and eased financing rules in a bold move to captivate investors—but markets aren't sold yet. Over the weekend, China's Ministry of Finance announced a significant cut to stamp duty, currently the largest expense for Chinese stock traders, along with a lowered deposit ratio for margin financing. The changes also included a slowdown in the pace of IPOs, citing recent market conditions as the reason. While these actions aimed to reinvigorate the nation's capital markets, Chinese stocks experienced a tumble on Monday after a brief initial surge.

2. Is the stock market's runway running out? Despite rosy headline figures, key indicators show that less than half of the S&P 500 stocks are trading above their 200-day moving averages, and fewer than a third are above their 50-day averages. Add to that nearly 80% are languishing below their 20-day averages. The number of stocks outperforming the index is near decade lows. The only bright spot? The Energy sector, where 91% of stocks are above their 50-day average, compared to less than 40% in all other sectors. These signals collectively suggest that the market may not be as robust as it appears at first glance.

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4. Headlines

   1. Economists now believe there is a better than 50% chance that the Federal Reserve will start to increase interest rates again before the end of 2023.

   2. The White House is moving forward with a new crypto tax law. (Read More)

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