2023 has been a weird year.
On the one hand, the S&P 500 is up over 17% year to date — a fantastic 12-month return by any stretch of the imagination.
On the other hand, Morgan Stanley analysis shows that the average stock is down this year, seven of the 11 sectors in the S&P 500 have declined since January, and the vast majority of this year’s gains can be attributed to a small group of stocks.
“Such weak price breadth is not indicative of a healthy bull market, in our view, and accurately reflects the challenging earnings dynamics occurring under the surface of the market as evidenced by the weakness we’ve seen in earnings revisions breadth,” Morgan Stanley chief investment officer Michael Wilson wrote in a recent note.
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