A look under the surface of the market reveals Wall Street could be in for even more gains, if history is any indication. Bespoke Investment Group noted that roughly 80%-85% of S & P 500 stocks are trading above their 50-day moving average, a widely followed technical level indicating an individual security’s short-term momentum. When this large a cohort of the benchmark trades above their 50-day average, the S & P 500 has averaged a 6.13% gain in the following six months, based on data going back to 1990. Over the following 12 months, that average gain goes up to 12.27%. The firm also noted that the index is positive more than 80% of the time in the six and 12 months following such strong market breadth. The firm added that this marks the first time since last year that breadth has been that strong. This under-the-surface improvement comes as traders cheer U.S. data that indicates the Federal Reserve may be able to tame inflation without dragging the economy into a recession. On Wednesday , the Labor Department said the consumer price index rose 3% in June on a year-over-year basis, slightly less than expected. Another encouraging report came out Thursday, with the producer price index also gaining less than forecast last month .
