The S&P 500’s latest move to record highs may not be as good as it looks

The S & P 500 hit new highs on Wednesday, but there’s more to the story that investors need to be mindful of. While the broad index ventured into uncharted waters, Chris Verrone, head of technical and macro research at Strategas, pointed out that just about 16% of stocks hit 20-day highs in tandem. A lack of breadth by this measure indicates the S & P 500 is susceptible to a correction, he said. “Curiously, the % of stocks trading to a 20-day high remains light for what feels like a potent headline advance,” Verrone wrote to clients in a Thursday note. “The primary trend clearly remains in good shape,” he added. “But this is a blemish we want to be mindful of, as trending markets with a tepid new high list can be vulnerable to a setback.” .SPX YTD mountain The S & P 500, year to date Still, Wednesday’s return to all-time highs marks a positive development amid what has been a choppy trading month. The new month got off to a tough start as an escalation of conflict in the Middle East rattled traders before the blockbuster jobs report sparked a relief rally. With the latest moves, the S & P 500 is now tracking to end 2024 higher by more than 21%. Wednesday marked the 44th closing all-time high for the benchmark index in 2024, according to Bespoke Investment Group. If the trading year ended on Wednesday, 2024 would already go down as having the 11th most record closes for the S & P 500 going back to 1954, the firm said. Market strategists see a pullback ahead, however. The average year-end price target for the S & P 500 implies the index will decline around 3% from where it closed Wednesday, according to CNBC Pro’s subscriber-exclusive survey.