It’s going to be a good day for small caps… oh wait…
Things started off swimmingly this morning and, for the majority of the day it looked like today was going to be a good day, like many recent days. Small caps, which have been having a fabulous last few weeks fell hard as the day went on.
As you can see, over the past ten days, small cap stocks have been the clear market leader, though most equity markets have performed well.
The reason being given for this late fade across equity markets is growing concern over US / China relations; fear that the US government may announce sanctions tomorrow. Who knows if this will actually happen, but the rumors where enough to push US markets lower, with utilities performing best and energy stocks leading the decliners.
There’s nothing too exciting tomorrow on the earnings side, as Big Lots is the most notable name reporting results.
On the fixed income side, very short term securities saw minor gains while longer dated debt declined around a quarter percent. Nothing too exciting to report in that regard.
Looking forward, potential market return drivers could be market reaction to how re-opening the US economy goes, Coronavirus infection rates, US / China tension, and of course those wildcard events that no-one expects ;).
Nathan