ALBAWABA – United States (US) stock markets saw a shift in trends over the weekend, with non-Artificial Intelligence (AI) US stocks leading the market, Bloomberg reported on Sunday.
A version of the S&P 500 that is stripped of market-value biases has outperformed the conventional index by 1 percent, the New York-based news agency reported.
The index’s equal-weighted version has seen its best week since January.
Stocks of nine out of the S&P 500’s 10 members are rising, according to Bloomberg.
Industries that have conventionally trailed behind the AI and tech sector are taking the lead, with small-caps seeing their best week since March.
So far, Bloomberg estimates growth in non-AI US stocks at $6 trillion, contrary to Wall Street predictions for 2023.
Overall, US stocks have been rallying over the weekend, following a worldwide decline last week.
A Bloomberg index that tracks economic surprises has risen in all but two weeks since early April, hitting its highest level in more than two years.
Despite the consecutive Federal Reserve (Fed) rate hikes and the rising borrowing costs that come with them, the market seems to bode well for investors.
Unlike in 2022, Bloomberg explained, when rising rates spiked treasury yields and drew investment from the stock market to the treasury debt market, the market seems to be doing well on the notion that the widely feared recession is no longer an imminent threat.
Meanwhile, performance in factor-based indexes, which are tools that target stocks based on specific quantitative characteristics, signals improving market breadth as well.
In June, the Dow Jones US Thematic Market Neutral Momentum Index, which buys the market’s winners against losers based on recent returns, underperformed other popular strategies including value, which targets cheap stocks. Year-to-date, the opposite has been true, although neither factor has performed particularly well.
