Meme stocks are having a moment, but the broader market is rallying as well

Published Tue, May 14 20249:02 AM EDTUpdated Tue, May 14 202412:03 PM EDT

Meme stocks are having a moment, but the broader market is rallying as well. While GameStop's 74% rally got a lot of attention Monday ( "meme stocks are back!" ), the evidence indicates that a broad rally is dragging up a lot of stuff that hasn't been performing well this year. Since May, broad swaths of the market have been advancing for a simple reason, says Marko Kolanovic at JPMorgan. "The market is settling back into the soft landing narrative after softer US jobs data and dovish guidance from the Fed, ECB and BoE," he said in a note to clients Monday. You can see this in the broad markets. The S & P 500 advance/decline line is again near new highs. The S & P 600 Small Cap advance/decline is also near the highest levels since December, while the S & P Mid Cap 400 advance/decline line is at a new high. That is a broad advance. Not surprisingly, a lot of stuff that has been underperforming this year is getting dragged a bit higher by the broad rally. Consider that Monday's biggest gainers, all up more than 1%, were among the biggest losers so far this year. Losers this year, winners this week (YTD): Intel, down 30% Tesla, down 31% CVS, down 28% Etsy, down 30% Akamai, down 20% Illumina, down 19% Skyworks, down 16% Nike, down 15% Comcast, down 10% Snowflake, down 20% Electric vehicle-related stocks, all of which have had a terrible year, also had double-digit rallies on Monday, including Plug Power , ChargePoint Holdings , Fisker and QuantumScape . Speculative tech stocks, particularly those associated with Cathie Wood's ARK Innovation fund (ARKK), also rallied, including CRISPR Therapeutics , Unity Software , Teladoc and Robinhood . Sell in May? How's that working out? Here's that pain trade again: The market move that would upset the greatest number of participants would be a rally in May. It makes sense. After a big move up this year, everyone anticipated a 5% to 10% decline that would persist through a good part of the summer. .SPX YTD mountain S & P 500 year to date And, of course, the opposite happened. After a brief 5% decline in mid-April, the S & P 500 is up 3.6% in May, and is less than 1% from an historic high. The CBOE Volatility Index (VIX) closed at the lowest level of the year on Friday at 12.55. "That flush we had — that minor 5.5% minor pullback we had last month — that was enough and now we're back to the bull market," said Ryan Detrick from Carson Group on CNBC on Monday night. So when you hear the tired old refrain, "meme stocks are back," take a look at the rest of the market. A lot of stuff is back, if only for a short time.