Markets are down this morning, the rally in the major indices may have ended. I talked about the deteriorating market breath last week, despite the recent strength in tech—particularly AI-driven companies such as Amazon and the AI “Magnificent Seven”—there is concern about the narrowness of the rally. More than 300 S&P 500 stocks ended Monday in the red, even as the index itself closed slightly higher. This is bearish. The leaders are also losing momentum, like Palantir, the stock dropped over 4% in after-hours trading, raising fears of overvaluation.
The US government shutdown is also weighing on sentiment, the shutdown is delaying the release of key economic data such as the jobs report, adding uncertainty to the macro picture. Crypto continues to decline, I said crypto was leading the way, I was right. It will be interesting to see what happen in November, a bullish month for the stock market. This time the rally appears to be stalling in November. This happens because stocks have been rallying for months, they are overbought.