Small-cap U.S. stocks’ show of strength turns to weakness
Here’s my chart for today. I’ll talk about it shortly after 3:30 p.m. Eastern (12:30 p.m. Pacific) on the Bloomberg Businessweek radio show. Also, I’ll present my Stock of the Day just after 4:15 p.m. (1:15 p.m.) on social media. You can hear me on Bloomberg Radio or see me at Bloomberg Global News on YouTube.
Anticipation that smaller U.S. companies would benefit more from economic stimulus than larger ones “appears to be wearing off,” according to Charlie Bilello, chief executive officer of Compound Capital Advisors LLC. Bilello cited a ratio between exchange-traded funds that track the Russell 2000 and S&P 500 indexes in a blog post Friday. A similar ratio for the ETFs’ underlying indexes fell 16% from a high in March through Friday, according to data compiled by Bloomberg. Along the way, the gauge of small-capitalization stocks’ relative strength gave back more than half of an almost year-long, 44% rally.