Market has big bifurcation between the haves and the have nots, says Bespoke's Paul Hickey

Market Breadth & Concentration - S&P 500 market breadth reached a historic low, indicating extreme market concentration [2][3] - A 4-day streak showed market cap weighted index outperforming the equal weight index by over 0.5% each day, an unprecedented event [4] - The cap weighted index has outperformed the equal weighted index by at least 2.5% for two consecutive months, a trend not seen since 1999 [5] - Across most sectors, cap-weighted versions are outperforming equal-weighted versions, highlighting the dominance of mega-cap stocks [9] Impact of Government Shutdown - Government shutdown is creating uncertainty, driving investors towards mega-cap stocks as defensive plays [6][7] - The gap between cap-weighted and equal-weighted indices widened in the last six weeks due to the government shutdown [7] Consumer & Sector Performance - Consumer discretionary sector is up 1% this month, primarily driven by Tesla and Amazon; excluding these, the sector is down an average of 3% [9] - 75% of stocks in the consumer discretionary sector are down, reflecting consumer concerns and reduced spending [9] Potential Reversal & Future Outlook - Expectation of a reversion to the mean between equal-weighted and market-cap-weighted S&P 500 [8] - Anticipation of a "boomerang effect" in consumer spending once the government reopens, favoring consumer-leveraged stocks [10] - The benefits of AI are expected to accrue to smaller firms in the future [6]