May 25, 2020
Weekly Market Outlook
By Keith Schneider
US Equity markets regained its footing with most key benchmarks gaining 3% for the week. The NASDAQ 100 is up over 8% YTD while the IWM (Grandpa Russell) is down -18.58% during the same period. This divergence in price action between small caps and growth stocks mirrors the issues facing the nation on both the political and economic front. Depending on whom you speak to about the markets, we are either in a massive bubble or it is the greatest buy opportunity since 2009.
The bull camp can point to FANG stocks, big tech, biotech, and social media names that have been able to profit handsomely during the quarantine and are running away in price (some hitting new highs). On the bear side of the coin, small caps lag with the Financial and Service sectors languishing and unemployment soaring to depression era levels. Hertz, Pier 1, and many retailers filed for bankruptcy.
Furthermore, the NASDAQ 100 is just 1 1/2 ATR’s from its all-time highs, which seems remarkable. Can both theories be true? If so, how will this resolve?
This week’s highlights are:
Stay Safe and Best Wishes for your trading