MidCap vs. LargeCap. Technical & Fundamental Levels to WatchThe Russell 2000 trailed the S&P 500 significantly in 2023, gaining about 17% compared to a gain of about 24% for the large cap index. That underperformance has spilled over into 2024.
As of July 10, 2024 the Russell 2000 YTD is about Zero compared to a 17.75% gain in the S&P 500 (SPX) and 23.50 gain in Nasdaq Composite Index (IXIC).
By the way, that valuation measures make the small cap Russell 2000 index much more compelling when compared to the S&P 500.
Small caps relative to the S&P 500 on a price-to-book basis is back to where it was in 1999.
As of June 30, 2024 small caps price-to-book (P/B) ratio is 2.10, as it described on FTSE Russell 2000 Index Factsheet, while Total US Market (Russell 3000) P/B ratio is 4.42.
I'll be brief. Perhaps it will be the briefest brief over the past ten god years I'm here on TV.
DON'T MISS IT, AS IT ONE PER LIFE OPPORTUNITY.
The main technical graph is ratio between RUT (Russell 2000 Index) and S&P500 Index, and it back to support that was never seen over the past 25 years, since March 1999.
What's happened with market at these times?
⭐ Nasdaq Composite Index doubled in price over the next 12 months (March, 1999 - March, 2000), than turned 4x down.
⭐ S&P500 Index printed +20 per cents (March, 1999 - March, 2000), than turned 2x down.
⭐ March 1999 was the absolute low and was a launch point of 12 years of outperformance for Small caps vs Large caps.
Will history repeat itself..? Who knows... But personally I believe - Yes, it can.
