Small-Caps Surge
It’s been another really good quarter for stocks.
The S&P 500 Index $SPX closed up 44.91 points and 0.86 percent at 5,248.49 on Wednesday, which means that heading into the final trading day of March it’s less than two points away from finishing up a second straight double-digit quarterly gain.That hasn’t happened in more than 10 years, and it’s only happened five times in the past 50 years.
But look at the Russell 2000 Index $RUT go, rising more than 2 percent. The small-cap-focused index, outperforming the big boys, broke out to a new 52-week high on Wednesday.
This is a rally off cheap valuations supported by a healthy economy and corresponding strong revenue and earnings expectations.
As Gregg Greenberg of Investment News pointed out last Friday, the Russell 2000 has been narrowing a severe underperformance gap against the S&P 500, noting that this narrowing has fund managers thinking about a change of leadership.
Greenberg cited Greg Tuorto of the Goldman Sachs Small Cap Core Equity ETF $GSC, who sees an earnings recovery for the entire market that will be felt most powerfully in the small-cap space.
And it’s all good.
Here’s another piece of technical trivia to keep in mind today, courtesy of Jeffrey Hirsch of the Stock Trader’s Almanac: When the day before the Good Friday market holiday is the last trading day of the first quarter, it’s generally a boost for the market.
The Dow Jones Industrial Average is up seven out of 10 occurrences, with an average gain of 0.18 percent. The S&P 500 is also up seven out of 10 times, with an average gain of 0.29 percent.
The Nasdaq, meanwhile, is up six of eight times at an average of 0.51 percent, and the Russell 2000 is up six out of seven for an average gain of 0.47 percent.
That’s a pretty friendly trend for this “Fake Friday.”