The celebration of a potential debt ceiling deal was a mixed affair. All the major indexes sold off after a gap-up open, and overall breadth was about 3,700 gainers to 4,400 decliners, but big-cap technology again managed good relative strength.
New 12-month highs were about equal to new 12-month lows at around 250, but we still saw narrow speculative action. The new highs are almost all big-cap names, while the new low list is mostly smaller stocks. Today Apple, Microsoft (MSFT) , Nvidia, Meta (META) , Taiwan Semiconductor (TSM) , Netflix, and Salesforce (CRM) all made new 12-month highs.
It is a very odd market mix, and the biggest problem is that the big-cap names are not acting as leaders. The strength is not broadening out, and we have to wonder if the big caps will falter before other stocks start to act better.
The debt ceiling deal still has some hurdles, and there may be further celebrations when the bill is finally passed, but the more important issue is how much longer this narrow AI leadership can run. There is some poor action under the surface, and the AI frenzy does not seem to be doing much to help.
We will see how things develop from here, but the one thing that is very clear is that the gulf between big-cap AI names and the rest of the market can't continue to expand for much longer.
Have a good evening. I'll see you tomorrow.