Big Caps Capture the News, Small Caps Beat ‘The Street’

Big Caps Capture the News, Small Caps Beat ‘The Street’

Big Caps Capture the News, Small Caps Beat ‘The Street’


  • President Trump’s historic tax reform driving Small Cap rally

Wall Street’s small caps are beating the The Street trading with 2 percentage points of the recent record highs at 1,615.5 on the Russell 2000

The Russell 2000 (RUTX) tracks US small capitalization companies, as does the S&P 600 (SPN) which closed at a record high Friday, underscoring the ascent of a section of the stock market often overlooked by the financial media but not by savvy investors.

When the economy is stronger than normal, small caps do better. With a good economy like are seeing we fully expect this to keep playing out into 2-H of this year, and beyond.

Widely used by small-cap oriented investment funds to benchmark their performance, the Russell 2000 has gained over 4% in 2018, compared to the S&P 500’s 2% rise.

That is a reversal from last year, when the Russell 2000 rose 13%, underperforming compared to the S&P 500’s 19% rally.

The Russell has gained 9% from its lowest Y 2018 close on 8 February, while the S&P 500 has recovered 6% in the frame.

The energy and technology sectors have led among small cap stocks, in line with the broader market.

Energy stocks in the Russell 2000 are up about 14% on average since the end of March, with technology small caps up about 5.9%, according to Thomson Reuters data.

The ‘Russell’  tracks the performance of the smaller 67% of the largest 3000 companies on the US stock market.

Small cap companies in the past have often paid higher tax rates than their larger rivals, which means that in many cases they have more to gain from President Trump’s tax cuts introduced this year.

The domestic focus of many small US companies makes them less vulnerable to international trade issues.

Monday, the major US stock market indexes came in at: DJIA +68.24 at 24899.41, NAS Comp +8.43 at 7411.32, S&P 500 +2.41 at 2730.13

Volume: Trade on the NYSE came in at 736-M/shrs exchanged

  • NAS Comp +7.4% YTD
  • Russell 2000 +4.3% YTD
  • S&P 500 +2.1% YTD
  • DJIA +0.7% YTD

HeffX-LTN’s Market Indexes Technical Analysis

Date Symbol Price Technical Analysis Support Resistance
14 May 2018 QQQ 169.98 Neutral (0.21) 168.18 170.72
14 May 2018 DIA 248.99 Neutral (0.13) 248.33 254.07
14 May 2018 SPY 273.01 Neutral (0.22) 270.61 274.41

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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