|Day's Range||1,535.41 - 1,561.74|
|52 Week Range||1,266.92 - 1,742.09|
Small-cap stocks still look cheap relative to large-caps, says RBC Captial Markets’ Lori Calvasina. Historically, such dislocations are small-cap buying opportunities.
The small-cap benchmark Russell 2000 index posted its worst week of 2019, falling nearly twice as much as the S&P 500. The Russell 2000 remains up 15% in 2019, following a 1.8% rebound on Monday, but if investors keep rushing out of smaller stocks, that could be a warning for the broader market, these analysts say.
Small-cap stocks are on a roll this year, but anyone buying now may be wise to stick with higher-quality companies, or funds that invest in them.
Small-cap stocks and transports got hammered last week, but are outperforming today. That could be good news for stocks.
Semiconductors, the Russell 2000, banks and industrial stocks have been weaker in the last couple weeks and with good reason. The key to getting markets moving again is to stop the decline in earnings estimates. Once again, we are seeing the usual hand-wringing over the fact that after a 17 percent rally from the December low, some of the stock market's sector leaders are meeting resistance.
10:39 a.m. The Dow Jones Industrial Average is rising again Monday morning, and that means the market is even more overbought than it was last week. Consider: The Dow has risen 144.74 points, or 0.6%, to 26,176.55, while the S&P 500 has advanced 0.5% to 2807.33, and the Nasdaq Composite has gained 0.8% to 7585.50 after President Donald Trump said he would hold off on raising tariffs on Chinese goods on March 1. The Dow has returned 20% since bottoming on Dec. 24, 2018.
U.S. stocks extended their winning streak to nine consecutive weeks and are on track for their biggest early-year advance in three decades, a dramatic turnaround that has given investors renewed faith in the nearly 10-year bull market. A more flexible approach to monetary policy from the Federal Reserve, easing U.S.-China trade tensions and a better-than-feared corporate earnings season have encouraged investors to ease back into the stock market, following the fourth quarter’s bruising selloff. The Dow Jones Industrial Average and technology-heavy Nasdaq Composite, along with the small-cap Russell 2000, notched their ninth straight weekly gain, while the S&P 500 rose for the fourth consecutive week.
The small-cap Russell 2000 index exited correction territory last week. It was the last of the major U.S. market indices to do so.
The Russell 2000 has rallied 16.5 percent in 2019, the third best start to a year. "Can't draw up a better start to new year than this, however we need a pullback," says Jefferies' Steven DeSanctis. Small caps' snapback is flashing an ominous signal.
Stocks are levitating higher on Wall Street, with major benchmarks and a few other market indicators offering signs that a rally that took hold in January may give way to a more lasting uptrend.
Renewed trade fears weigh on global indices, US market indicated to open lower amid a flurry of earnings reports.
Small-cap stocks were among the biggest losers during the stock market's rout late last year as investors worried about high leverage, but they have outperformed in 2019's rebounding market, with shares of debt-laden companies leading the charge. Another small-cap index, the S&P 600, has gained 12.1 percent. An expected pause in the Federal Reserve's course of interest-rate hikes - and optimism that a recession is not imminent in the next 12 months - support a further run in small-caps, investors say.
The iShares Russell 2000 ETF (IWM) IWM , which tracks the small cap-focused Russell, has rallied more than 11 percent in 2019, capping off Friday with its third up week in a row. Kevin O'Leary , co-founder of O'Leary Funds and co-host of "Shark Tank," told CNBC recently that several tailwinds should continue to benefit small caps over large caps this year. "Tax reforms haven't had their full effect yet and because the tax code has just been re-written for these all domestic companies.
Trade optimism supports stocks but traders are still wary, the talks could break down at any minute.
Banks and smaller companies propelled stocks to their best January in 30 years, a sign that investors are favoring sectors tied to the U.S. economy. The Fed’s statement Wednesday that interest-rate increases are on hold helped ease investors’ worries that higher rates would increase borrowing costs and curtail corporate profits. Cautious comments from central-bank officials including Chairman Jerome Powell throughout the month also fueled the stock rally.
Andrew Lapthorne, head of quantitative equity research at Société Générale, thinks so. The January effect of old used to show a significant reverse, with December’s winners becoming losers and vice versa. This year’s reverse was the strongest since 2001, Mr. Lapthorne says.
The US markets were flat in early Thursday trading despite a trifecta of good news. In Europe, the DAX was the only major index to post a loss at midday and that was small, only -0.35%.
US futures point to a big gain at the open for the broad equities market. European equities staged a rebound in early Wednesday trading although gains were not universal. Equity indices in Asia were mixed on Wednesday as traders await the outcome of high-level trade talks in Washington.