Stocks opened Tuesday on the flat side, but there is plenty of drama below the surface. Considering the last two weeks of August are among the lightest volume days of the year, there is a very high level of interest in the markets. That’s because there is a very unusual rally occurring. The S & P 500 is on the cusp of a nine-day win streak. The last nine-day win streak for the S & P 500 was November 2004, 20 years ago. The S & P is now within 1.1% of its historic closing high of 5,667 on July 16. The rally that began at the bottom of the market on Aug. 5 has dramatically broadened out. Signs of strong market breadth: 1) The S & P 500 Equal Weight ETF (RSP) closed yesterday at an historic high. 2) The NYSE advance/decline line is at an historic high. 3) All 11 sectors of the S & P 500 are up since the Aug. 5 low, with nearly half at or near new highs: S & P 500 sectors (since 8/5/24 close) Tech 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, consumer/defensive) Real estate up 3.6% (new high, interest rate sensitive) Utilities up 3.4% (new high, interest rate sensitive/AI play) Materials up 3.4% This is what a broad rally looks like: While technology (a growth sector) has been a leader, economically sensitive sectors like financials and industrials are 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 leaders (both sectors are at new highs). The factors leading to this broadening are well-known. The soft landing scenario is still intact. Economic data shows some slowing but job growth still strong, the Fed is expected to begin cutting rates in a few weeks, and earnings have been remarkably stable, with expected growth of 10% in S & P 500 earnings for 2024 and 15% for 2025 little changed in the last few months. Perhaps most importantly, the recent volatility in early August caused a significant unwind of many crowded trades, include parts of the yen carry trade, that may help make markets a little less volatile.