After a historic stretch of bad breadth in December, the stock market is starting to broaden.
The Invesco Equal-Weight ETF, or RSP, is up 3.6% this year, beating the regular S&P 500’s 2.8% rise. RSP is a proxy for market breadth because it counts every stock in the index the same. The S&P’s gains the past two years have been largely driven by massive technology stocks, especially those dubbed “The Magnificent Seven” by market observers.
“Everybody’s loved this ride in the S&P 500, that’s essentially been a tech ride,” Sevens Report Research’s Tom Essaye told Barron’s. “But the fact that a bunch of the other sectors can rally is really, really good, because it means that if you’re paying attention, and you do reallocate, you do rebalance, then you can get the best of both worlds.”
