U.S. stocks keep moving higher, with another green day on Monday. All three major indices again closed at all-time highs. But it’s how stocks are rising that seems a bit strange.
Most notably, this hardly seems like a a bull market full of or even ebullient optimism. Broad market indices keep drifting higher, but the S&P 500 still hasn’t had a one-day gain over 1% in over five weeks.
The stocks that are gaining, too, aren’t the kind of names that often rise at this point in a bull market. Cyclicals have done well, to be sure. But growth names have pulled back, have been mostly hammered, and many energy stocks are at or near 52-week lows. The long-awaited shift from growth to value seems to have arrived in some fashion, but that shift hardly has been consistent.
Tuesday’s big stock charts highlight three stocks along the continuum of the current market. They include the market’s biggest growth name, one of its cheaper large-cap stocks, and an intriguing play that’s somewhere in between. Together, they provide a cross-section of the trends currently at play for U.S. stocks. As such, they give some clues as to how the market has behaved in recent months and how it might behave going forward.
Amazon (NASDAQ:) has been notably excluded from the recent rally. Fellow tech mega-caps Apple (NASDAQ:), Alphabet (NASDAQ:, NASDAQ:GOOGL), and Microsoft (NASDAQ:) all trade at or just off all-time highs. As the first of Monday’s big stock charts shows, that’s not the case for AMZN stock — and that chart suggests it actually could get worse in the near-term:
- A key reason for the divergence between AMZN and its Big Tech brethren likely is valuation. As noted, high-multiple growth stocks have mostly weakened across the board in recent months. At 64x forward earnings, AMZN stock certainly qualifies. Again, this seems like a strange market, one in which equities are rising but without any sense of a “risk-on” environment. As a result, investors have chosen safer plays like MSFT and AAPL over AMZN.
Investors initially cheered Fox Corporation (NASDAQ:,NASDAQ:FOXA) executed with Walt Disney (NYSE:). But as the second of Tuesday’s big stock charts shows, those same investors have mostly shrugged since the sale closed in March.
Of late, however, FOX stock has bounced from October lows, and technically and fundamentally there’s an intriguing case for further upside:
The third of our big stock charts, Whirlpool (NYSE:), sits firmly on the value side of the market. WHR stock is one of the cheapest names in the S&P 500, at less than 9x forward earnings. The problem at the moment might be that’s one of the few positives WHR has going for it:
- WHR stock also has broken out of a narrowing ascending wedge, another bearish pattern. The 200-day moving average is the last bastion of support; if WHR stock breaks through that level, it re-tests $136 and then potentially $129. Accelerating volume in recent sessions only adds to the chart’s bearish read.
- And so the near-term trading in WHR should be interesting. Again, this does seem like a market that’s aiming toward the less-risky side of the market. But the question for Whirlpool stock is whether investors see it at a lower-risk play. Valuation would suggest it is. Almost everything else, however, suggests otherwise.
As of this writing, Vince Martin has no positions in any securities mentioned.
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