The indexes traded quietly Wednesday and closed poorly on breadth of 2,700 gainers to 4,700 decliners. The point loss was not big, but groups like financials, airlines, and energy lagged.
What was most notable about the action is the continued disconnect between big cap Nasdaq momentum stocks and the rest of the market. Apple (AAPL) stayed positive all day and offset weakness in hundreds of smaller stocks, but it was momentum stocks like Beyond Meat (BYND) , Shopify (SHOP) , Etsy (ETSY) and Wayfair (W) that stood it.
Quite often during the long bull market run over the past dozen years there were times when there was very narrow leadership in a few bigger cap names. It is happening again and is causing quite a bit of consternation for market players that are trying to reconcile significant economic problems with wild pockets of big-cap momentum.
The only logical way to reconcile the action is to focus on the plenty of cash out there that is looking for a home. Rather than buy "value," the money is chasing expensive growth names. It isn't what you'd expect in a market that is dealing with the issues that this one is but simple logic is seldom rewarded by the market beast.
There is a slew of earnings reports hitting after the close and it will be instructive to see how willing market players are to chase momentum. Given the level of liquidity out there, it is tough to bet against a continuation of this sort of action.
It is truly a tale of two markets -- a bull and a bear.
Have a good evening. I'll see you tomorrow.