David Kostin, Goldman Sachs' chief equity strategist on the S&P 500 trades just 17% below its all-time high
- amid the largest economic shock in nearly a century
- Below the surface of the market, however, the median S&P 500 constituent trades 28% below its record high
(Kostin is saying the breadth of the move is narrow, large cap way overperforming)
- Eventually, though, narrow market breadth is always resolved the same way .. narrow rallies lead to large drawdowns as the handful of market leaders ultimately fail to generate enough fundamental earnings strength to justify elevated valuations
The biggest 5 cap S&P 500 stocks account for 20% of market cap
- representing the highest concentration in more than 30 years
- the further market concentration rises, the harder it will be for the S&P 500 index to keep rising without more broad-based participation
