June 15, 2026
The stock market seems incredibly strong right now – huge earnings results, all-time highs, and so on. If you only look at the surface level, everything seems fine.
But the market is deeply split, highly concentrated, and driven by speculative trading. We’re living in an unhealthy market.
Take corporate fundamentals, which were exceptionally strong. Businesses outperformed analyst expectations by 9.2%. It’s the strongest reading since 2021.
Over the past few years, earnings surprises averaged between 3% and 5%. The recent 9.2% blowout means businesses are managing higher costs better than expected and companies are making a lot of money.
You’d think that would be a buy signal as most stocks do well. But that’s not happening.
The current rally is due to a tiny group of stocks known to be retail investor favorites – popular AI and technology names that have risen high as retail volumes soared. When that happens, the favored stocks easily beat the S&P 500 Equal Weight Index, which treats all index companies equally.
See, retail traders typically don’t buy boring businesses with heavy cash flows. They pile into popular stocks with hype. And since the main S&P 500 is weighted by market capitalization, a massive surge in a few mega-cap stocks can lift the entire index.
As markets rise, remember the rally isn’t broad. For such a large rise, the percentage of S&P 500 stocks at 20-day highs is unusually low. That suggests this is a bull market that’s speculative and concentrated.
Daniel A. White is an investment advisory representative of and provides advisory services through CoreCap Advisors, LLC. Daniel A. White & Associates and CoreCap Advisors are separate and unaffiliated entities.