|Day's Range||1,679.973755 - 1,693.713379|
|52 Week Range||1,351.199951 - 1,708.560059|
According to the CBOE Volatility Index (VIX), widely considered the best fear gauge in the market, volatility rose more than 13 percent to 15.13. Additionally, another fear gauge, 10-year U.S. Treasury yields, fell to 2.868 percent early Wednesday. U.S. retail sales rose more than expected in July. According to the Commerce Department, retail sales increased 0.5 percent last month. Crude oil prices plunged on Wednesday after the U.S. Energy Information Administration said U.S. crude stocks rose by 6.8 million barrels, trouncing the forecast for a 2.6 million barrel draw down during the week-ended August 10.
“The positioning here is that the other countries are all free trade and the U.S. is not. If that’s really what we’re saying then just drop all tariffs and all nontariff barriers. Go down to zero. That would be better outcome for the whole world,” St. Louis Federal Reserve Bank President James Bullard.
Q2 GDP climbed 4.1% for best pace in nearly four years, driven by strong consumer and business spending as well as surge in exports
The broad U.S. stock market is within 2% of a new high despite big drops by some of the technology giants that have powered recent gains, reassuring investors that the nine-year rally remains on firm footing to continue its run. For months, analysts and investors have been debating whether a stock market whose gains have largely been driven by a handful of technology companies may be subject to a sudden reversal. As Facebook suffered its biggest slide as a public company, dragging other technology stocks down with it, the S&P 500 slipped just 0.3%.
The big hit to FAANG stocks and small-caps indicate that the market leadership may shift. Market volatility remains low, but signs of a rotation are growing. All year, two groups felt kind of bulletproof: FAANG names because the growth was so amazing, and small caps (Russell 2000) because the economy was so strong and they would do well even if there was a tariff war.
The index is still trading near record levels, but some analysts warn that strong corporate earnings and economic data are masking the tariffs’ potential negative impact on small businesses. At least half a dozen small, domestically focused companies, including motor-home manufacturer Winnebago Industries Inc., lighting firm Acuity Brands Inc. and agricultural machinery maker Art’s Way Manufacturing Co., have said the recent tariffs imposed on steel and aluminum and a host of other Chinese goods threaten to disrupt their businesses. “Right now, all this is muted because the U.S. economy happens to be growing very strongly,” said Mary Lovely of the Peterson Institute for International Economics.
Mayflower Advisors' Larry Glazer warned recently that a lot of investors are setting themselves up for pain by paying an "absurd and ridiculous premium" for small cap stocks. Smaller companies have been captivating investors because they do most of their business in the United States and, therefore, insulated from trade war fallout. In addition, they've been big beneficiaries of President Donald Trump massive tax reform package that passed late last year.
Trade fears have slammed markets around the world, but U.S. stocks are rising as strong profits and spending lead investors to overlook the risks of a downturn. The S&P 500 and Dow Jones Industrial Average have gone up all but one day since the U.S. and China imposed tariffs on $34 billion of each other’s goods on July 6. The S&P 500 is now up 4.8% for the year.
Today’s U.S. consumer inflation report didn’t trigger the same volatile response in the markets we saw from the U.S. producer inflation report on Wednesday, but nonetheless, it was impressive.
Pension fund managers across the country have been underperforming the market and charging hefty fees to do so. That's helped widen the gap between what retirees are owed and what local governments have in their coffers.
The " Fast Money " traders shared their first moves for the market open. Pete Najarian was a buyer of Constellation Brands STZ . Brian Kelly was a buyer of Consumer Staples XLP . Dan Nathan was a seller of the Russell 2000 ETF IWM .
Stocks pared gains Tuesday afternoon, with a downward reversal in small caps and energy stocks contributing to a softening session on Wall Street.
Small-cap growth funds, best performer in the second quarter among the major Thomson Reuters Lipper's U.S. Diversified Equity Funds Categories
Is one of the strongest segments of the U.S. stock market in 2018 about to turn? Morgan Stanley on Monday downgraded its view on small-capitalization stocks to underweight, writing that recent gains in the category, particularly relative to its large-cap counterparts, had been overdone. Small-cap stocks have rallied in 2018, with the gains particularly pronounced in the past several months as broader equities have been pressured by growing tensions between the U.S. and its major trading partners.
For fund investors who are seeking exposure to the sector, the question now is which mutual fund or exchange-traded fund might make the most sense. First, some background: The Russell 2000 index of small-cap stocks has climbed 10.3% since the start of this year, compared with 3.2% for the S&P 500 index of large-cap stocks (excluding dividends), as small stocks have benefited disproportionately from the tax cut passed last year, stronger growth in the U.S. than overseas, a rising dollar since mid-April and global-trade disputes. “With economic data still solid, small-cap stocks probably have more runway in the months ahead,” says Michael Sheldon, chief investment officer at RDM Financial Group-HighTower Advisors in Westport, Conn.
Goldman Sachs, meanwhile, told investors to consider domestic, consumer companies as a way of navigating turbulent trade policies. Utilities — classic defensive plays with domestic-only markets — could also benefit if this is a prolonged conflict, some said. Others are sticking with the hot small cap trade in the face of this escalating conflict.