Remember earlier this year when the “FAANG” trade of Facebook (FB), Apple (AAPL), Amazon (AMZN), Netflix (NFLX), and Alphabet (GOOGL) was the only thing that mattered for the market?  As the S&P 500 hit new all-time highs in June and July, the FAANG stocks were flying.  While bulls were elated, market bears were arguing that a rally driven by just a handful of mega-cap names was not sustainable.

For a few minutes in late July, the broad market did pull back a few points when the FAANG trade suffered a dive.  Since August, though, the FAANG trade has been a bust, but the S&P 500 has made a big leg higher.

The charts below tell the story:

Below are individual six-month charts of the five FAANG stocks.  As you’ll see, Netflix (NFLX) is the only one currently trading at new highs along with the S&P 500.  (Feel free to use our interactive stock chart tool at any time!)

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With the S&P 500 on pace for its eighth straight day of gains, one would expect that just about everything would be in rally mode and above its 50-day moving average (DMA).  Looking at the numbers, though, that isn’t the case.  The chart below shows a running total of the percentage of S&P 500 Industry Groups that are currently trading above their 50-DMA. As of this morning, just over 70% of the 24 S&P 500 Industry Groups are above that short-term trendline.  While that represents a vast majority, with the S&P 500 hitting record highs on what seems like a daily basis, we would expect to see a higher reading.  What’s perhaps even more surprising, though, is that the current reading is only slightly below the average reading of 69.6% for all days so far in 2017!

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So what Industry Groups are holding the market back?  The table below shows the YTD change of all 24 S&P 500 Industry Groups along with where they are currently trading versus the 50-DMA.  Groups that are still trading below their 50-DMA are Food Beverages & Tobacco, Media, Utilities, Commercial Services, Consumer Durables, Food & Staples Retail, and Real Estate.  Obviously, it has been a tough time for stocks in the Consumer Staples sector as well as those paying relatively high dividends.  Despite the relative weakness of these Industry Groups, though, not a single one is more than 2% below its 50-DMA, so it wouldn’t take much to get them back above that level.

On the other end of the performance spectrum, the Autos and Auto Parts Industry Group is currently more than 10% above its 50-DMA.  That’s pretty extended on a short-term basis!  Additionally, four other Industry Groups are more than 5% above their 50-DMAs.

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The long-term price chart for major US equity indices continues to amaze.  Below are charts of the large-cap S&P 500 and Wilshire 5,000 (all US stocks) going back to 1990.  At this point, the S&P 500 is up 62% from the all-time high it made back in 2007 prior to the Financial Crisis.  The index needs to get just above 3,000 to mark a “double” from its prior highs.

The Wilshire 5,000 is up even more from its prior bull market high made in 2007 at +67%.

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While the price chart for the S&P 500 shows huge gains versus prior all-time highs, things aren’t nearly as strong for global equity markets.  As shown below, the Bloomberg World Index (which still has a big US weighting) is indeed at new all-time highs, but it’s up just 13% from its 2007 bull market high.

And emerging markets aren’t even at new highs compared to 2007.  As shown below, the EEM ETF is still down 18%!

If you had to choose between US equities and international equities, which asset class will perform better over the next ten years?

Bullish sentiment on the part of individual investors saw a slight uptick this week, but with the S&P 500 up for seven straight days, that was to be expected.  What is a bit surprising is the fact that barely more than a third of investors consider themselves bullish at this point.  According to the weekly survey from AAII, bullish sentiment increased to 35.6%, and for those keeping score at home, it is the 144th straight week where bulls have been out of the majority.

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Even more surprising than the small increase in bullish sentiment following seven straight up days was the relatively large increase in bearish sentiment which increased from 28.7% up to 32.8%.

With bullish and bearish sentiment both on the increase, neutral sentiment fell from 37.9% down to 31.6%, and that’s the lowest level since April.

Each month, Bespoke runs a survey of 1,500 US consumers balanced to census.  In the survey, we cover everything you can think of regarding the economy, personal finances, and consumer spending habits.  We’ve now been running the monthly survey for more than three years, so we have historical trend data that is extremely valuable, and it only gets more valuable as time passes.  All of this data gets packaged into our monthly Bespoke Consumer Pulse Report, which is included as part of our Pulse subscription package that is available for either $39/month or $365/year.  We highly recommend trying out the service, as it includes access to model portfolios and additional consumer reports as well.  If you’re not yet a Pulse member, click here to start a 30-day free trial now!

Our September 2017 Pulse report was recently published, and it showed a big surge in a number of economic readings on a month-over-month and year-over-year basis.  After a summer slowdown, our newest Pulse report suggests that we’re in the midst of another uptick in the economy.

Below is a heatmap included in our Pulse report that summarizes changes in the major economic categories covered in our monthly survey.  Green is indicative of strength, and as you can see, there’s a lot of it this month!

Below are charts that show the results of two questions we ask consumers on a monthly basis.  The first asks respondents how their current income compares to their income from a year ago.  As you can see, this reading made a new multi-year high in September, suggesting that consumers are flush with spending money as we approach the holiday months.

And consumers do plan on spending their additional income, as evidenced by the second chart below which asks about expected spending on discretionary items over the next few months.

To see our full economic Pulse report for September, click here to start a 30-day free trial now!