![There is a lot of drama that could happen in the markets in the last two weeks of August.](https://news7g.com/wp-content/uploads/2024/08/108021519-1723819260588-gettyimages-2166298433-AFP_36EC446-780x470.jpeg)
Stocks opened flat on Tuesday, but there was plenty of drama beneath the surface. Considering the last two weeks of August are some of the lowest volume days of the year, interest in the market is high. That’s because a very unusual rally is underway. The S&P 500 is on the verge of a nine-day winning streak. The last nine-day winning streak for the S&P 500 was in November 2004, 20 years ago. The S&P is now just 1.1% away from its all-time closing high of 5,667 on July 16. The rally that began from the market bottom on August 5 has extended significantly. Signs of strong market breadth: 1) The S&P 500 Equal Weight ETF (RSP) closed at a record high yesterday. 2) The NYSE advance/decline line is at an all-time high. 3) All 11 S&P 500 sectors are up since the August 5 low, with nearly half at or near new highs: S&P 500 sectors (since the close of 8/5/24) Technology up 13.1% Consumer discretionary up 8.7% Financials up 7.5% (new high, economically sensitive) Communication services up 6.8% Industrials up 5.7% (near new high, economically sensitive) Health care up 4.7% (new high, consumer/defensive) Energy up 4.6% Consumer staples up 3.6% (new high, interest rate sensitive) Utilities up 3.4% (new high, interest rate sensitive/AI activity) Materials up 3.4% Here’s what a broad rally looks like: While tech (a sector that has been a major driver of the rally) has been a major driver of the rally, the rally has been broad-based: Growth sectors) are the leading drivers, with economically sensitive sectors like financials and industrials remaining strong, but so are interest-rate sensitive sectors like real estate and utilities. And consumer/defensive groups like consumer staples and health care are also leading the way (both hitting new highs). The drivers of this expansion are well known. The soft-landing scenario remains intact. Economic data shows some slowdown but job growth remains strong, the Fed is expected to start cutting rates in a few weeks, and earnings have stabilized significantly, with the projected 10% growth in S&P 500 earnings for 2024 and 15% for 2025 largely unchanged over the past few months. Perhaps most importantly, the recent volatility in early August has caused a significant shift in many crowded trades, including part of the yen carry trade, which may help to make the market a little less volatile.