|Day's Range||1,653.19 - 1,689.15|
|52 Week Range||1,450.32 - 1,715.08|
Joining Yahoo Finance's Myles Udland is Brian Shannon, CMT and founder of www.alphatrends.net, who breaks down the price action in the SPDR S&P 500 ETF (SPY) and the Invesco QQQ Trust (QQQ) as well as Take-Two Interactive (TTWO).
The stock market fell early, but rebounded late, after the U.N. health agency said it wouldn't call a global emergency to deal with China's virus.
The stock market rose Wednesday as it shook off its fears of a deadly new virus from China and focused on earnings and industry turnarounds instead.
Growth indices soundly trounced value indices in 2019 and it's starting the same way this year, but that trend can't last forever.
Small-cap stocks badly lagged their large-cap rivals last year. The Russell 2000 and S&P SmallCap 600 indexes returned an average of just 24% compared to 31.2% for the large-cap S&P 500, including dividends paid.
If you don’t mind quirky stocks and a little more volatility, investing in so-called Small Dogs could generate higher yields.
The “darlings” of small-caps are beating the Russell 2000 by an average of 2.5 percentage points, with 67% of the stocks edging the benchmark so far this year.
(Bloomberg) -- Small-cap shares are a good hedge for potential downturns, volatility strategists say. Credit Suisse Group AG adds that investors who aren’t “feeling” Bernie Sanders’s prospects risk being blindsided by the U.S. election.But overall, stock swings shouldn’t impress.UBS Group AG strategist Stuart Kaiser predicts realized volatility on the S&P 500 Index will drop from about 19% in the first half of the year to 12% in the second half as growth trends turn positive and inflation momentum goes negative. Credit Suisse strategist Mandy Xu says it’ll average 13% over 2020 given that the Federal Reserve is on hold and likely to ease further if downside risks materialize. The VIX’s mean will be 15, Xu predicts, down slightly from 15.4 in 2019.“Policy risks or a more significant growth slowdown are needed to shift volatility notably higher,” Kaiser wrote in his 2020 outlook Wednesday.That doesn’t mean they see a boring year.“While trade risk has receded, geopolitical risks have emerged,” Xu wrote on Monday. “From the 2020 U.S. election to ongoing tensions in the Middle East, a number of catalysts could drive the VIX to excess of 25.”Xu and Kaiser like hedges on the iShares Russell 2000 exchange-traded fund. A slowdown in the economy could have a bigger effect on shares of small companies, which are highly cyclical and affected by trade tensions, Kaiser said, adding that his firm’s growth outlook for the first half of the year is below consensus.Cantor Fitzgerald LP chief market strategist Peter Cecchini agrees.“We not only prefer Russell 2000 put spreads to the S&P 500,” he wrote Thursday, “we are now high conviction that long-ish dated Russell put spreads are a must to any high-yield or equity portfolio with significant long exposure. The volatility surface allows hedged investors to effectively implement downside strategies in risk asset markets, which have generally lost their minds.”Tallbacken Capital Advisors LLC’s Michael Purves, however, advocates hedges on the VanEck Vectors Semiconductor ETF or the Technology Select Sector SPDR Fund as opposed to the Russell 2000 ETF. Small caps are among sectors that “have a lot of catch-up to do,” he said Thursday, while there are hints of “an early stage of a pivot” lower in momentum for semiconductors.Trading the ElectionThen there’s the U.S. election, which Kaiser says is “more tactical than structural” as a market event. He recommends trades like one- to three-month puts on the S&P 500.“We don’t expect the election alone to drive a regime shift in realized volatility,” he wrote. “We see the election as more of a tactical trade in the run-up to Election Day.”Xu points particularly to the Democratic primary as a potential surprise, given that volatility appears to be more affected by Elizabeth Warren’s poll numbers than those of Sanders, who is currently in a strong position in surveys.Volatility markets are “yet to feel the Bern,” she wrote, noting that long-dated volatility on assets like managed-care stocks “normalized with Warren’s fall in the polls. Yet investors seem to be forgetting about Bernie…”Societe Generale SA strategists led by Vincent Cassot recommend a long February-March futures spread, as well as shorting the VIX February 16 put versus the March 16-13 put spread. “February-March will be the most significant period in deciding the Democratic nominee for the U.S. presidential election in November,” they wrote in a note Friday. Trades from UBS include:Upside in Germany or Hong Kong in case of a risk/growth reboundGo long the Japanese yen in case U.S. growth slows and risk markets come under pressureShort oil volatility; selling upside on United States Oil Fund “is attractive”Trades from Credit Suisse include:Sell a June put on the Invesco QQQ Trust Series 1 to buy a call spread on the firm’s view of improving margin headwinds and strong earnings growthFor a cheap upside play, buy the S&P 500 June 103% call contingent on the SPDR Gold Shares fund being above 103% at expirationFor a macro risk-off hedge, try a June Euro Stoxx 50 95% put contingent on the euro/dollar pair being below 1.09, as that the region’s equities and currency tend to move together during periods of market stress(Adds Societe Generale recommendation)To contact the reporter on this story: Joanna Ossinger in Singapore at email@example.comTo contact the editors responsible for this story: Christopher Anstey at firstname.lastname@example.org, Cecile Vannucci, Cecile GutscherFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Earnings season is off to an impressive start, and geopolitics are relatively quiet for now. The S&P 500 Index (SPX) reached 3300 for the first time yesterday, and Alphabet Inc’s (NASDAQ: GOOG) market cap hit $1 trillion. About 7% of S&P 500 companies have reported Q4 results so far, with 74% posting better than expected earnings per share, FactSet said.
Investors who expect 2020 to be a year of solid economic growth should consider small-cap stocks, according to Scott Opsal, director of research and equities at Leuthold Group.
The Russell 2000 made a new 52-week high and has been rising bullishly since Jan. 1. Watch for new leadership in the retail and biotech fields.
As the small- and mid-caps lag vs. large ones, we see that the Top 5 stocks in the S&P; 500 account for 17% of the index -- here are the three ways this could shake out.
While stock futures saw their pre-market gains roll back a little after the government reported a lower-than-expected December payrolls gain of 145,000, that’s a figure well within the range economists say is needed to keep unemployment near current 50-year lows. Unemployment remains low, and job gains over the last three months averaged a healthy 184,000. Jobs in construction rose 20,000, which was good to see, but the Labor Department pointed out that construction job gains in 2019 were just half of the 2018 level.
The stock market was lower near midday Friday following the U.S. airstrike that killed Iranian Quds Force leader Qassim Soleimani.
Equity index futures came out swinging to start 2020, with the S&P, Dow, and Nasdaq contracts all surging into new all-time highs. The /NQ showed an especially strong movement, gaining almost 1.5% by the day's end and following a ramp into the close on Tuesday. The /RTY fell more than 1% yesterday, taking out the previous lows near 1660 before firming up near the 21-day exponential moving average and finishing down only 0.1%.
Small-capitalization stocks missed out on a broad stock-market rally Thursday, acting as a fly in the ointment during the first full day of trade in 2020, when equities otherwise stormed out of the gate. The small-cap Russell 2000 index (RUT) fell 1.7 points, or 0.1% to 1,666.7 on Thursday, versus a 1.2% advance for the Dow Jones Industrial Average (DJIA) , a 0.8% gain for the S&P 500 index (SPX) and a 1.3% rise for the Nasdaq Composite index (COMP) . The Russell underperformed the large-cap S&P 500 index by the largest margin since Nov. 11 of last year, according to FactSet.