The market's rebound from the April lows has had a speculative, risky leadership profile—but broader participation suggests the bull can keep running for now
As shown below, year-to-date gains are subdued, but nonetheless positive. However, since the April 8th closing low for the S&P 500, all major U.S. indexes are up by hefty double-digit percentages. Per the index maximum drawdown column, the route to the April 8th closing low from the prior high on February 19th was not fun. The Nasdaq and Russell 2000 indexes hit bear market level declines (defined as a peak-to-trough drop of at least 20%), while the S&P 500 was saved from the same fate courtesy of the epic reversal day on April 9th (during that day's intraday low, the S&P 500 had dropped into bear market territory).
Sector swings
Another place to observe dramatic shifts in performance from phase to phase is at the sector level. As shown below, the "growth trio" of sectors—Technology, Communication Services, and Consumer Discretionary—all had bear market level declines between February 19th and April 8th. Technology has had the most impressive rebound, not far from a 50% gain off the low, but not enough to bring its year-to-date performance into the lead.
Not without budding risks
This year's maximum drawdown, rebound, and overall move higher have all had some markings of speculative fervor. As shown in the chart below, the biggest swings have been in the riskiest corners of the market—not least being heavily shorted stocks, non-profitable tech stocks, and companies most favored by retail traders.
Bears going into hiding
