From Ticker Sense
One of the missing ingredients to today’s rally was the lack of participation by the brokerage group. In fact, while the S&P 500 was up 62 basis points, the proxy for the brokerage group, Goldman Sachs (GS), was just barely up. Should, as a CNBC reporter just asked, we be worried about the lack of participation by one of the market’s key groups?
In order to test this, we looked at all prior periods since the start of 2006, where the S&P 500 has risen by more than 50 bps. In the chart below, red dots indicate days where the market was up at least half a percent and Goldman Sachs underperformed by 50 basis points or more (16 days). Green dots also represent days where the S&P 500 rose by at least 50 basis points and Goldman Sachs outperformed (49 days). So yes it uncommon for Goldman Sachs to underperform on up days (only occurs 24% of the time), but as the chart shows these days tend to occur at random junctures rather than at short-term peaks or troughs.
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