In Markets "In a Nutshell"

Markets “In a Nutshell” for July 22, 2024

Investment Week at a Glance

Stocks finished mixed for the week. The Dow Jones Industrial Average rose 0.70%, the S&P 500 was down 2.00%, and the NASDAQ fell 3.60%. Foreign stocks (MSCI EAFE) were also down, falling 2.40%. Bond prices were down for the week, with the 10-year U.S. Treasury ending the week at 4.24%.  (Data source: Wall Street Journal)

Tech Selloff

Technology has been the big winner and the main reason the market has reached new highs, but we are seeing a shift in the winners and losers. The NASDAQ fell 3.6% last week while the Dow Jones, which has been the loser of the major indexes, was up 0.7%. This is now a few weeks in a row that we have seen a shift in markets. It is good to see the market broaden out the gains and not just be concentrated in the tech sector. When looking at the year-to-date numbers, technology is still leading the way but in the past month technology has been the worst-performing sector of the market and is the only one negative. Real estate has led the way the past month but continues to be the worst performer of the year.

Small Cap Stocks

Another sign of the market broadening out is the string performance of small caps in recent weeks. From January to June the small-cap index was only up by 1% despite the S&P 500 being up over 15%. Just from July 9-16, small caps were up by 12% as investors anticipate a rate cut in the coming months. This is good news for the markets to not only see the large companies grow but also the smaller ones as it creates a stronger market when more stocks are up than just the mega-cap names. This is a very rare week for a group of stocks to jump this much and most likely won’t be repeated but it could set up small caps for a strong 2nd half to 2024 after a very poor 1st half.

Quiz:

What is the small cap index that is closely followed in the US? (Scroll Down for Answer)

  1.     Russell 2000
  2.     NASDAQ
  3.     Dow Jones
  4.     S&P 600

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Answer below.

 

 

Have a Great Week!

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Answer:

1.   Russell 2000. The Russell 2000 is comprised of 2000 small cap stocks and is the major index people look to when discussing performance of small caps.