Today’s 2.39% rally for the S&P 500 was its best start to March EVER. The index is now up nearly 10% off its intraday lows from February 11th, and underlying breadth has definitely strengthened significantly. Below is a chart showing the percentage of stocks in the S&P 500 trading above their 50-day moving averages. As of the close today, 69% of stocks in the index were back above their 50-days. That’s the highest reading seen since late 2015, and it’s a healthy sign for a market that has been unhealthy for quite some time.
Nine of ten sectors now have at least 50% of their stocks trading above their 50-day moving averages. The Financial sector is the one holdout with a reading of just 47%.
One of the most notable sectors in terms of breadth right now is Industrials, which has 83% of its stocks above their 50-days. The Industrials sector has been a serial underperformer over the past 18 months due to weakness in global manufacturing readings. But while still weak, manufacturing readings of late have actually been coming in better than expected in the U.S., and it has many investors looking at a sector like Industrials and thinking that the turn might be here.