Investors,
I hope you’ve all been enjoying the research I’ve been sharing over the past few days. It just so happened that the end of the month lined up just before the weekend, so I’ve been sending out an onslaught of research. Based on the emails I’ve received from many of you, I’m really happy to hear your thoughts and answer additional questions that arise from my analysis! Keep them coming!
Market data has been thin since the last Premium Market Update, as stocks started the week strong (Monday & Tuesday) but lost momentum after that. From my perspective, there was no rhyme or reason as to why this downward rotation occurred; however, the mid-week turbulence basically created a net zero effect. From my perspective, this was simply caused by psychological exhaustion from the massive rally we’ve experienced since the March 14th lows. While market data was rather thin this week, I’m really excited to share this research article with you today — I think we’re seeing important dynamics take place and it’s vital for investors to be aware of market undercurrents. Let’s dive in!
Here were the weekly returns for each of the major U.S. indexes:
Dow Jones Industrial Average $DJX: -0.12%
S&P 500 $SPX: +0.06%
Nasdaq-100 $NDX: +0.72%
Russell 2000 $RUT: +0.64%
Based on this data alone, we can come to some general conclusions:
Value is weakening relative to growth, as evidenced by the S&P 500 & the Nasdaq outperforming the Dow Jones.
Small caps outperformed large cap stocks last week. We can generally arrive at this conclusion based on how the Russell 2000, a basket of 2,000 stocks, outperformed the Dow Jones & the S&P 500.
Let’s confirm if these two assumptions are indeed true. As I’m writing this, I literally don’t know if the findings below will validate or disprove the conclusions above, so let’s verify…