Global equities’ nearly decade-long bull run is stoking anxiety about its ability to power on, according to Richard Turnill, BlackRock’s global chief investment strategist. .

Turnill writes in BlackRock’s Weekly Market Commentary that one concern is “narrow breadth” — or, a fragile state when a small group of stocks is contributing the bulk of market returns, buoying the broader index.

“Today’s U.S. stock market appears to have little breadth — on the surface,” he writes. “The top 10 companies have accounted for 53% of the total return of the S&P 500 Index so far this year, versus 30% in 2017.”

However, according to Turnill, this says little about the remainder of the index constituents. The median stock’s earnings-per-share growth stands at 21%, versus a 20-year average of 0.2%.

“The median stock has delivered positive returns year to date, supported by strong earnings – suggesting a resilient market,” he writes.

In addition, Turnill points out that cross-sectional volatility — a measure of dispersion in returns across stocks — is near its lowest level in at least 20 years across most major regions, according to BlackRock’s Risk & Quantitative Analysis team. Turnill says this suggests most stocks are “marching in the same direction.”

Turnill sees today’s strong equity performance, especially in the U.S., as broad-based and driven by healthy fundamentals and solid earnings momentum.

In addition, Turnill does not see narrowing equity market leadership as a warning sign of the market’s health.

“We see little evidence of a link between a narrow market and forward equity market performance,” he writes. “The relationship between the share of stocks outperforming the index at any point and market returns one year out is negligible, our analysis of historical data shows.”

BlackRock’s view is that a lack of breadth in declining markets also has little predictive power.

According to Turnill, the recent selloff in emerging market equities was led by a relatively narrow group of stocks, with the 10 bottom performers in the MSCI EM Index accounting for nearly 40% of the hit. A single stock was responsible for 14% of the decline.

“Yet we see EM stocks supported by attractive valuations and robust earnings,” Turnill writes.

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