Beware the 'perfect storm' brewing in stocks - one that could send the market crashing at any moment
- As stocks continue to make record highs, the narrow leadership in major indexes is masking weakness lurking under the surface.
- Vincent Deluard, a macro strategist at INTL FCStone, says a correction could rock the vulnerable stock market within the next few weeks due to a "perfect storm" of bearish factors.
At this point it's common knowledge that the stock market is being driven higher by an elite cabal of high-flying companies.
That equity Illuminati includes such companies as Apple, Amazon, Microsoft, Google, Visa, and Mastercard, which have accounted for 42% of the S&P 500's gains since the stock market's correction in early February, according to data compiled by INTL FCStone.
This disproportionate contribution to index gains has been frequently cited as a bearish signal - one that highlights a troubling lack of breadth in the market. Because when a select handful of companies are doing the heavy lifting in the market, it can often mask underlying weakness.
Vincent Deluard, a macro strategist at INTL FCStone, notes that record highs for stocks during periods of low breadth have historically occurred near the end of bull markets. He cites the market collapses in 2000 and 2007 as the most contemporary examples. ...
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