Small-Cap Stocks Outperformed But S&P-500 Changes Its Direction

The U.S small-cap stocks outperformed the large-cap stocks for the fifth consecutive week. Russel-2000 Index closed higher about 0.98% as a weekly gain. However, The other U.S major benchmark Indexes fell about less than 1% and change its direction led by the real estate and financial sectors. 

The investor’s assessment of prospects for further economic stimulus and U.S. regulatory approval of a new coronavirus vaccine and the rising unemployment rates turns market sentiment into the neutral mode.

Even though the European Central Bank expanded its economic stimulus program, the European shares closed lower about -.05% to -2.15% as a weekly loss on concerns about the rising numbers of new daily Covid-19 cases and uncertainty surrounding a post-Brexit trade deal and U.S. stimulus measures. Italy’s FTSE-MIB Index underperformed among other major European benchmark Indexes.

The weekly performances of major APAC Indexes were mixed. Nifty-50, ASX-200 and Kospi-100 Indexes were closed higher for the week. Nifty-50 Index outperformed and rose about 2%. On the other side, Nikkie-225, Hangseng-50 and China’s Shanghai Indexes were lost its momentum and ended negatively.  Shanghai Composite Index underperformed and fell over -2.83% as a weekly loss.

Weekly market movement

Underlying_2020-12-14 -Small-cap stocks outperformed.

Gold ended flat and closed with a modest negative mark. The international (Brent) oil prices crossed USD 50 per barrel for the first time since the onset of the pandemic. The cost of bitcoin fell around 5% for the week, eroding some of the gains from the cryptocurrency’s recent rally.

Sentiment Analysis

The below chart illustrates the news and social media sentiment trend direction for the week. Most of the global Indexes turns into the neutral mode.Small-Cap Stocks Outperformed. The U.S benchmark Indexes set a new record high on last Wednesday but turns into a negative direction late after Wednesday. More than 850,000 Americans filed first-time unemployment claims in the latest weekly report, exceeding economist’s expectations.

The late news sentiment direction on Dax-30 and FTSE-100 Index from European market showing a slight uptrend. On the other hand CAC-40 and FTSE-MIB Indexes showing modest downtrend after late Wednesday. But the overall sentiment remains neutral for the European market.

The news sentiment trend for the most critical benchmark Indices from the APAC region turned in to neutral mode. But Nikkie-225 showing the modest downtrend in sentiment direction for the week. China’s sentiment may turn into negative direction this week on renewed tensions with the U.S. after a second primary index provider removed some Chinese companies from its benchmarks following a Trump administration executive order.

Sentiment Trend Chart

Sentiment Chart_2020-12-Small-cap stocks outperformed but S&P 500 changes its direction-14

The following critical economic data refer to  released includes including Housing Starts, Retail Sales growth, the Fed Funds Target Upper Bound, and Markit PMI breakdowns.

Sentiment Values

Sentiment Table_2020-12-14-Small-cap stocks outperformed but S&P 500 changes its direction.

Note: The sentiment scores applied as an additional overlay to your existing models to improve the performance further.

Buy & Sell Signals

The below table is showing the buy/sell signals generated based on InfoTrie’s proprietary Investment/ Trading models. These models are developed with the combination of technical, fundamental, quantitative techniques and primarily the news-based sentiment score as an additional overlay.

I have tabulated the random signals from several InfoTrie’s Trading/Investment models.

Buy_Sell_2020-12-14-Small-cap stocks outperformed but S&P 500 changes its direction.

The news sentiment score provides a significant improvement, significant “Alpha” compared to the traditional investment/trading models.

 For more details on the analysis, accessing complete tear sheets or white paper for the models, subscription details for News Sentiment data and other consulting works, please contact us with the information provided below.

InfoTrie Alternative Data

InfoTrie Financial Solutions Pte. Ltd.
Alternative Data, Sentiment Analysis, Financial IT and AI Consulting

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