During the first month of 2024, analogous to a homing pigeon returning to its roost, the M7 index reverted with a vengeance to the top of the charts, surprising investors who had assumed that market breadth would continue to improve for the 3rd consecutive month. While results from Alphabet Inc. (GOOG.US) and Microsoft Corp. (MSFT.US) account for the one-day reversal shown on the far-right of the one-month indexed price graph below, subsequent earnings from Meta Platforms Inc. (META.US) and Amazon.com Inc. (AMZN.US) more than enabled the domination of market-weighted vs. equal-weighted S&P 500 performance to continue. While we foresee improved market breadth this year, we do not believe small cap stocks (Russell 2000 in yellow) will regain their lustre.
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