Key Takeaway: The year-to-date return of the median stock in the S&P 500 is lower after 8 months than it was after the first 8 days of the year.
More Context: The median stock has struggled (and so far failed) to build on the progress it made in January. Mega-cap resiliency, however, is supporting the continuation of index-level uptrends. That has helped keep our systematic asset allocation model tilted toward equities even as market breadth turned south last month. The departure of broad market strength and the continued absence of investor fear suggests the path for the index could get rockier as we move toward the final months of the year.
Go Deeper: Our latest Relative Strength report and Asset Allocation model both suggest that commodities could be poised for a turn in the leadership seat if the August struggles for stocks and bonds continue in September.