Charles Schwab head trading and derivatives strategist Joe Mazzola joins Madison Mills and Seana Smith on Catalysts to analyze current market breadth conditions in US equity markets.
Mazzola emphasizes the significance of stock market (^DJI, ^IXIC, ^GSPC) breadth during earnings season, highlighting the strength of the US dollar (DX-Y.NYB) as a potential factor that "could affect some of the tech earnings." He notes, "What we would need is the rest of the 493 stocks to kind of catch up."
"It doesn’t mean that we can’t have another year like ’24 where tech led the way, but it does mean that a broadening would help," Mazzola adds.
Mazzola identifies financials as a "really important" sector in demonstrating market breadth beyond technology. He points to proposed presidential policy and the current yield curve as indicators supporting a bullish outlook for financials at the start of the trading year, suggesting that "favorable" results from the financial sector could "kick off things a little bit" for broader market participation.
However, he cautions that higher yields (^FVX, ^TNX, ^TYX) present a risk to "investor dollars."
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