DON - Big Decline But No Bad Breadth?

2024-07-25 12:50:00 ET

Summary

• On Wednesday, the S&P 500 shed 2.3%.
• The major key to this weakness, which we detailed in last night's Closer, was how the the Magnificent 7 had a historically bad session given poor reactions to earnings of Tesla and Alphabet.
• Yesterday was another example of the topic that has consistently been discussed in recent years in which the concentration of the largest stocks in the S&P 500 had an outsized impact on the index's moves regardless of what the rest of the market has done.

On Wednesday, the S&P 500 shed 2.3%. As we noted on X , that snapped a 356-trading day stretch without seeing a one-day decline of at least 2%. The major key to this weakness, was how the the Magnificent 7 had a historically bad session given poor reactions to earnings of Tesla (TSLA) and Alphabet (GOOGL). Those declines on earnings were a drag on the rest of the mega-cap space and in turn the broader index. Yesterday was another example of the topic that has consistently been discussed in recent years in which the concentration of the largest stocks in the S&P 500 had an outsized impact on the index's moves regardless of what the rest of the market has done....

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