When stock selection matters most
The Sandbox Daily (6.23.2026)
Welcome, Sandbox friends.
Today’s Daily discusses:
a market of winners and losers
Let’s dig in.
Blake
Markets in review
EQUITIES: Dow -0.09% | Russell 2000 -0.96% | S&P 500 -1.44% | Nasdaq 100 -3.29%
FIXED INCOME: Barclays Agg Bond +0.08% | High Yield -0.09% | 2yr UST 4.198% | 10yr UST 4.946%
COMMODITIES: Brent Crude -0.34% to $75.61/barrel. Gold -1.75% to $4,129.3/oz.
BITCOIN: -3.26% to $62,389
US DOLLAR INDEX: +0.36% to 101.39
CBOE TOTAL PUT/CALL RATIO: 0.92
VIX: +12.79% to 19.49
Quote of the day
“Rest is not idleness, and to lie sometimes on the grass under trees on a summer’s day, listening to the murmur of the water, or watching the clouds float across the sky, is by no means a waste of time.”
- John Lubbock, The Use of Life
Stock picker’s market?
Investors often refer to a “stock picker’s market” as an environment in which company-specific fundamentals matter more than broad market forces.
One way to assess whether such an environment exists is through stock correlation, which measures how closely individual stocks move together.
When correlations are high, macroeconomic factors tend to dominate and stocks often rise or fall in unison.
When correlations are low, returns become more differentiated, creating a wider gap between winners and losers – and potentially more opportunities for skilled stock selection. These are environments where active management can perform well and add incremental value.
As the chart below illustrates, correlations typically spike during periods of market stress, including the 2008 Global Financial Crisis, the 2011 European debt crisis, and the 2020 pandemic.
In contrast, correlations tend to decline when innovation, competitive positioning, and company execution play a larger role in driving returns.
Today, the CBOE’s measure of implied correlation among the largest S&P 500 stocks sits near its lowest level in more than two decades, suggesting that investors may be operating in one of the most favorable stock-picking environments in recent memory.
I believe the current backdrop is largely being shaped by the disruptive impact of artificial intelligence.
As AI reshapes industries, companies enabling the technology are seeing expanding growth opportunities, while others face increasing competitive pressures and business model disruption.
This divergence is creating a market characterized by greater dispersion in outcomes – a hallmark of a stock picker’s market and an environment in which active security selection may have a greater opportunity to add value.
Source: FactSet
That’s all for today.
Blake
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Welcome to The Sandbox Daily, a daily curation of relevant research at the intersection of markets, economics, and lifestyle. We are committed to delivering high-quality and timely content to help investors make sense of capital markets.
Blake Millard is the Director of Investments at Sandbox Financial Partners, a Registered Investment Advisor. All opinions expressed here are solely his opinion and do not express or reflect the opinion of Sandbox Financial Partners. This Substack channel is for informational purposes only and should not be construed as investment advice. The information and opinions provided within should not be taken as specific advice on the merits of any investment decision by the reader. Investors should conduct their own due diligence regarding the prospects of any security discussed herein based on such investors’ own review of publicly available information. Clients of Sandbox Financial Partners may maintain positions in the markets, indexes, corporations, and/or securities discussed within The Sandbox Daily. Any projections, market outlooks, or estimates stated here are forward looking statements and are inherently unreliable; they are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur.
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