By
Steve Muchoki
April 16th, 2024
While the big cap stocks are feeling the weight of reality in the broader stock market, the Russell 2000, a benchmark for small-cap stocks, also fell 3.86% in a week.
The United States stock market is at a point of inflection as there is a mixture of bearish and bullish performances across the board with the S&P 500 futures surging by 0.50% on Sunday. The futures tied to the Dow Jones Industrial Average (INDEXDJX: .DJI) added 191 points and the Nasdaq 100 futures edged up 0.3%.
These bullish performances were in direct antagonism with the indices performances at the close of the Friday trading session. The S&P 500 (INDEXSP: .INX) dropped 0.84% to 4,538.43 while the Dow Jones slumped 0.17% to 34,580.08. The Nasdaq Composite (INDEXNASDAQ: .IXIC) plunged 1.92% to 15,085.47 as driven by the massive selloff in the shares of the electric automaker, Tesla Inc (NASDAQ: TSLA). The automotive company plunged by a massive 6.42% to $1,014.97 per share.
In addition to the lingering concerns about the Omicron variant of the COVID-19 virus, the job data released by the Department of Labor also lend a good point for investors to evaluate the market. Nonfarm payroll soared by 210,000 last month, the Labor Department said Friday, this figure was below the 573,000 number economists surveyed by Dow Jones were expecting.
“The job growth number is disappointing, no doubt, especially considering the survey period fell before we even know the name of the newest Covid-19 variant,” said Jeffrey Buchbinder, equity strategist at LPL Financial. “While Omicron may curb hiring a bit over the next month or two, we remain confident in our expectation for strong job gains and above-average growth in the US economy in 2022.”
From records, the trio of Dow Jones, S&P 500, and the Nasdaq Composite all closed negatively for the previous week. Of the three, the broad market benchmark, the S&P 500 recorded the fourth consecutive weekly loss, the first time since September 2020.
S&P 500 Futures Gain: Hope for Small-Cap Stocks
While the big cap stocks are feeling the weight of reality in the broader stock market, the Russell 2000, a benchmark for small-cap stocks, also fell 3.86% in a week.
“Despite our forecast for a flat year for the S&P 500…we are still bullish on pockets of the market, including small caps,” Bank of America said Friday in a note to clients. “Small caps are more domestic, more exposed to the services spending recovery, bigger beneficiaries of capex/reshoring and are inexpensive vs. large caps,” the firm added.
Should there be good control over the COVID-19 situation, small-cap stocks are bound to be amongst the biggest gainers in the long run.
The cryptocurrency industry was also amongst the biggest losers over the weekend as a massive price correction hit the ecosystem once again. Bitcoin (BTC) slumped to its lowest price in the past month as it traded at $42,874.62 over the weekend. Despite the fact that the coin has pared some of its losses and is now trading at $47,435.57, it is still dragging an encompassing market decline with the broad market cap down 5.23% to $2.18 trillion.