‘K-shaped’ stock recovery widens gap between winners and losers

Financial Times/Richard Henderson and Eric Platt

“The US stock market’s advance this year has been propelled by some of the largest companies in America, including the likes of Apple and Amazon. While those tech giants have notched up a string of new highs alongside companies that have benefited from the viral outbreak — groups such as pizza chain Domino’s and soap maker Colgate-Palmolive — the majority of companies in the index are still down on where they were.”

USAGOLD note:  Some Wall Street promoters are making the case that this is the beginning of a new leg to the stock bull market, but this article suggests things might not be what they seem.  In fact, the K-shaped overlay showing FANG* stocks (green, +68.5%) versus the DOW 30 Industrials (red, – 2.18%) year to date suggests the possibility of a stock market rally built on a weak foundation.

Overlay chart showing FANG stocks versus Dow 30 K-shaped marketChart courtesy of TradingView.com

*FANG stocks index includes Facebook, Apple, Amazon, Netflix, Google

Repost from 8-22-2020

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