Need to Know: Outpeformance by Russell 2000 shows this market‘s breadth

It’s Friday the 13th, but the bulls should be feeling a bit lucky, given the S&P 500 stands at a five-month high.

Sure, today’s earnings from big banks could cast a hex on this market. Plus, we’ve got that U.S.-U.K. “special relationship” turning extra special.

But our call of the day may embolden the bulls. It tackles a hot topic — this FAANG-tastic stock market’s top heaviness — and it comes from A Wealth of Common Sense’s Ben Carlson, who also throws a bone to the bears.

“The stock market is not currently being driven by just a handful of stocks,” writes Carlson, Ritholtz Wealth Management’s director of institutional asset management.

One “tell-tale sign that this isn’t the case” comes from the fact that small-cap stocks are outperforming this year, he says. The small-fry Russell 2000 is up 10% in 2018, besting the S&P’s gain of 4.7%.

Carlson also points to a key indicator for market breadth — the NYSE Advance-Decline Line. He offers the chart below that plots that gauge’s moves alongside the S&P’s action.

“If there were only a few stocks rising, you would see a large divergence between these lines,” he writes. “Instead, we see the advance-decline fairly in line with the stock market. This tells us that there are far more stocks rising than just a few of the biggest names.”

The Michigan-based portfolio manager gives a few caveats as well, including:

• “We certainly could see what many would call an overdue correction in tech stocks that brings down the rest of the market.”

• “If you’re invested solely in a total market or S&P 500 index fund, then yes, your returns will likely be driven by a handful of stocks. This is simply the way market-cap weighting works.”

Go to read his full post. (H/t )

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And see:

Key market gauges

Futures for the Dow  , S&P 500 and Nasdaq-100 are little changed, after the Dow  , S&P and Nasdaq Composite closed with gains , with the tech-laden Naz scoring an all-time high. The three gauges are on track for weekly rises of more than 1%, as of Thursday’s close.

European stocks are , after . Gold  is dropping, as oil and the dollar index advance.

See for the latest action.

The chart Here comes 2,800 (shown in red) again.

“The S&P 500 is knocking on the 2,800 door again, and I think we have a much better chance of breaking through this time,” technical analyst says in a note to clients, as the index sits at its highest closing level since Feb. 1.

The Arbeter Investments president is encouraged in part by that NYSE Advance-Decline Line mentioned earlier. Meanwhile, Elliott Waver Ari Gilburt has been predicting a .


The quote Trump and May in Brussels earlier this week — caption contest?

“If they do a deal like that, we would be dealing with the European Union instead of dealing with the U.K., so it will probably kill the deal.” — President Donald on British Prime Minister Theresa May’s so-called soft Brexit plan.

He is saying that approach would wreck any potential trade pact between the U.S. and the U.K.

His comments appeared late Thursday in the , which said it had interviewed the president just before he arrived in the land of warm beer. The pound following the comments, even as Trump today is sounding friendlier and saying the countries’ relationship is

The buzz

J.P. Morgan Chase just , and and also reported before the opening bell.


Commerce Secretary after acknowledging that he failed to sell some holdings as required by ethics agreements.

found Johnson & Johnson should pay $4.7 billion in damages to 22 women and their families who blamed ovarian-cancer cases on asbestos in the company’s iconic baby powder.

There is still buzz around yesterday’s on Capitol Hill featuring the FBI’s Peter Strzok. He testified that he didn’t leak damaging information about Trump before the election.

China’s trade surplus , as tensions with the U.S. ramped up. Meanwhile, a Shenzhen hotel is denying a report that it was .

The Justice Department a key antitrust ruling that had given a green light to AT&T buyout of Time Warner.

On the U.S. data front, a arrived before the open, and a reading on consumer sentiment is slated to hit once trading gets underway.

The Federal Reserve has a couple of things for us: a monetary policy report, plus the Atlanta Fed’s Raphael Bostic doing a Q&A with CPAs. Did he lose a bet or something?

Check out:

Tesla news: Elon Musk by urging employees not to form a union, and the car maker has , so a tax credit will be phased out.

Bitcoin is trading around $6,200 as fans highlight a key anniversary:

Random reads

It’s , in a Wimbledon final again, never left tennis.

A former Georgia Bulldog faces an ex-Illinois star in a .

Oregon is about to have the in the U.S.

Apple’s Macbook Pro update ignores big concerns from users.

Nicotine and millennials and a hedge fund: The .

Fiat workers over Ronaldo’s new deal.

“Do not eat this cereal,” :

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