No holiday for small caps

12/28/20
  • Broad market moves sideways, small caps press on
  • Financials and tech advance, energy retreats
  • This week: More housing numbers…and Happy New Year!

Aside from some intraday volatility on Monday amid concerns of a new, fast-spreading strain of COVID in Britain, last week was a quiet, holiday-shortened affair for the US stock market, with the S&P 500 (SPX) essentially unchanged for the week:

Chart 1: S&P 500 (SPX), 10/22/20–12/24/20. S&P 500 (SPX) price chart. Close to unchanged for the week.

Source: Power E*TRADE


The headline: Small-cap stocks keep working through the holidays.

The fine print: It may have been a ho-hum week for the broad market, but the small-cap Russell 2000 (RUT) posted another respectable gain, and has now gained more than twice as much (30%) as the Nasdaq 100 (NDX) or SPX since October 30.

The number: 0.9%, last Wednesday’s estimate-topping durable goods number for November—another unexpected bit of economic resiliency. October’s number was also revised upward, from 1.3% to 1.8%.

The scorecard: In the process of setting two more record highs last week, the RUT cracked 2,000 for the first time and pushed its year-to-date gain to 20%:

US stock index performance table for week ending 12/24/20. S&P 500 (SPX), Nasdaq 100 (NDX), Russell 2000 (RUT), Dow Jones Industrial Average (DJIA).

Source (data): Power E*TRADE


Sector roundup: The strongest S&P 500 sectors last week were financials (+1.2%), information technology (+0.8%), and real estate (-0.3%). The weakest sectors were energy (-2%), consumer staples (-1.2%), and communication services (-1.1%).

Highlight reel: On Monday Anterix (ATEX) jumped 49% to $43.94, while XL Fleet (XL) skyrocketed 86% to $32.59 on Wednesday. On the downside, Tredegar (TG) tumbled 25% to $15.25 on Monday and Fubotv (FUBO) slid 15% to $52.59 on Wednesday.

Futures action: February WTI crude oil (CLG1) dipped along with stocks early last week, but bounced back to close Thursday at $48.23/barrel. Ditto for February gold (GCG1), which ended the week down slightly at $1,883.20/ounce.

Last week's biggest futures up moves: January milk (DCF1) +6.3%, January soybeans (ZSF1) +5.2%, January lumber (LBSF1) +4.8%. Biggest down moves: January natural gas (NGF1) -3.2%, January rough rice (ZRF1) -2.6%, January platinum (PLF1) -2%.

Coming this week

Just a handful of numbers to watch during the New Year-shortened week:

●Tuesday: S&P/Case-Shiller Home Price Index, Consumer Confidence, Existing Home Sales
●Wednesday: Advance Trade in Goods, Advance Wholesale Inventories, Advance Retail Inventories, Pending Home Sales
●Thursday: Weekly Jobless Claims

This week’s earnings include:

●Monday: Weibo Corp (WB)

Go to the E*TRADE market calendar for an up-to-date earnings schedule and complete list of splits, dividends, IPOs, and economic reports. The Active Trader Commentary also lists earnings announcements, IPOs, and economic report times each morning.

Market Mover Update: Thanks in part to last week’s Monday–Tuesday pullback, the SPX has gotten its holiday rally off to a decent start. It will kick off trading today up 0.4% from Tuesday’s close, with today being the day with the highest winning percentage of the eight days of Christmas.

 

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