And Then There Were None

The comments below are an edited and abridged synopsis of an article by Chris Puplava

Over the last year, global equity markets have declined significantly, while US markets have been strong. This is likely due to the tax stimulus, as well as record corporate buybacks. It is only a matter of time, however, before they too roll over and join the global correction that has been underway all year.

By the close of the books in June, the S&P 500 had a price gain of 1.7%, or 2.6% including dividends. What’s amazing about this is that most of the gains this year both in the S&P 500 and the Nasdaq are due to just three stocks: Amazon, Netflix and Microsoft.

While a handful of stocks are holding up the main indices, the other side of the coin is how much pain has been experienced elsewhere. Looking at how stocks have performed over the last year and where they are relative to their 1-year high, things get even more interesting.

As of July 20, the S&P 500 is 2.5% off its 1-year high, which makes it seem as if the broad market is more or less at its high over the past year. However, looking under the surface at each of the 500 members in the S&P 500 shows a radically different picture.

Puplava discusses emerging market equities; commodities and currencies; foreign market weakness; and canaries in the coal mine.