Intuitively you probably knew this already, but an important piece in the WSJ highlights the fact that intra-market correlation among stocks has it the highest level since the crash of 1987.
In other words — based on the data collection of Birinyi Associates — basically more than ever before, the average stock just moves in the direction that the overall market is moving in.
If anyone comes on TV and says it’s a “stock picker’s market” they’re just lying to you.
It you’ve been paying attention, you can’t be surprised by this. All the discussion is macro these days. There’s a reason your cab driver is paying more attention to the euro than the Dow (well, that may be an exaggeration, though it might not be).
Add in the existence of ETFs, and other instruments that represent wide swaths of the market, and it’s easy to see why individual stocks don’t move on their own (much) anymore.
What would merit further examination is the effect this is having on the few stocks that actually don’t perform in line with the market, like Apple, which has been almost a must-own if you want to outperform, it would seem. Does the overall state of the market, cause an even bigger premium on standouts like that and a few others?