It’s not all sunshine and rainbows when looking under the hood of this latest leg of the stock market rally. BTIG’s Jonathan Krinsky pointed out that, while the S & P 500 is trading 4% above its 50-day moving average, only about 60% of the benchmark’s components are above their respective short-term moving averages. The S & P 500 last week extended its weekly winning streak to three, rising 1%. Krinsky also noted that the advance-decline line at the New York Stock Exchange, a breadth measure that calculates the difference between advancing and declining stocks, fell all five trading days last week. “Since 2006, that occurrence has happened just two other times: 8/24/20, and 11/19/21. The former saw a few more days of rally before a -10% drawdown, while the latter saw a quick -5% drawdown before a marginal new high that ended that cyclical bull market,” wrote the firm’s chief market technician. .SPX YTD mountain SPX year to date To be sure, a sample size of two instances hardly makes a historical trend. “But the offset is that in years that are up 20% or more, that soft patch is often hard to find,” said Krinsky. This technical backdrop comes as traders brace for key U.S. consumer prices data due out this week. While inflation figures have recently taken a backseat to labor numbers, a hotter-than-expected report could curb expectations of Federal Reserve rate cuts — thus hurting stocks. Elsewhere Monday morning on Wall Street , Morgan Stanley upgraded Reddit to overweight from equal weight. The bank also hiked its price target on the stock to $200 from $70, implying upside of nearly 23%. “As we look ahead to ’25, we don’t think we have fully missed this scaling platform that is rapidly shipping its pipeline of engagement and advertising initiatives,” analyst Brian Nowak wrote. “Looking ahead, we see user and time spent per user growing, ad pricing rising (as advertisers pay for improving performance) and upside to ad load as well.
Something odd is happening during this latest portion of the stock rally