Fu Peng: Significant Bubble in Market Capitalization Concentration and Divergence in Market Breadth of US Stocks

On October 20, Fu Peng, chief economist of New Fire Group, pointed out that the current US stock market, represented by the S&P 500, is exhibiting a bubble in market capitalization concentration and a severe divergence in market breadth. While the weighted stocks appear stable under the support of passive funds and collective buying, most stocks have actually undergone a deep technical pullback. The market breadth is approaching a critical limit, and the volatility suppression may be broken at any time.

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