Led by technology companies and small caps equities advanced. The catalysts were continued reassessment of dovish remarks made by the FRB Chair and optimism surrounding trade talks.
Commenting further about small capitalized issues or aka Main Street America, Bloomberg writes led by energy small caps are marking its best start to a year since 1988. Bloomberg further writes small caps were up 22.4% for that year versus a high single digit return for the S & P 500.
Four days does not make a trend but after years of languishing, it is comforting to see monies going into the traditional “growth companies” rather than the mega size momentum shares.
In days gone by, historically growth companies were the smaller capitalized entities, not the largest companies in the world as have been the case of the last 7-8 years. Some would argue it is these mega sized entities that had the stellar growth, a view that is partially correct. But I ask how much larger can a $750 billion or $1 trillion company become?
What will happen today?
Last night the foreign markets were up. London was up 0.86%, Paris up 1.21% and Frankfurt up 0.63%. China was down 0.26%, Japan up 0.82% and Hang Sang up 0.15%.
The Dow should open moderately higher as the US expressed optimism that it could reach a “reasonable” deal with China on going trade negotiations. Oil is up for the seventh consecutive day. The 10-year is unchanged at 2.70%.
Ken Engelke
Chief Economic Strategist Managing Director
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