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Small-Caps Lead, Greece Remains Focus

By Matthew Kerkhoff

 

The market rout we’re seeing is heavily concentrated in large-cap stocks, suggesting that the trigger for this prolonged weakness has much to do with international exposure. To verify that, let’s look at a few quick charts.

 

This first chart shows the relative performance of the domestically oriented small-caps, measured by the Russell 2000, to the large-cap S&P 500. Small caps regained control at the beginning of May and have not given back the lead.

 

 

A chart of the the Russell 2000 (below) shows that this index remains near its all-time highs and the short-term trend is bullish, even in the face of everything going in Europe.

 

On Friday I mentioned how the headlines coming out of Greece seem to be taking center stage while subtly improving US economic data is coming in under the radar. This chart provides evidence that the strengthening US data is not being ignored, it’s simply causing investors ... Log in or subscribe to continue reading.


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