SMALL CAPS LEAD LARGE CAPS -- LARGE CAP VALUE IS STRONGER THAN GROWTH
SMALL CAPS ARE IN THE LEAD... Over the past week, the past month, and year-to-date, small caps have been the strongest market group measured by size. Mid-caps came in second over all three time spans -- while large caps came in last. Charts 1 and 2 show the S&P 600 Small Cap and S&P 400 Mid Cap Indexes both reaching new highs last week. Chart 3 shows that the S&P 500 Large Cap Index didn't quite make it into new highs by last Friday (although odds are pretty good that it will hit a new high this week). To fully understand what's going on, however, it's instructive to compare relative strength between growth and value in all three categories.
Chart 1
Chart 2
Chart 3
SMALL CAP GROWTH VERSUS VALUE... There hasn't been too much of a difference between small cap growth and small cap value. Charts 4 and 5 show both small cap measures reaching new highs last week. Year-to-date, small cap growth (+7.4%) has a slight lead over small cap value (+7%). Over the past month, however, small cap value (+6.1%) has a lead over small cap growth (+5.6%). Since the start of the year, mid cap value (+7.3%) has done a little better than mid cap growth (+6.4%). The differences between growth and value in small caps and mid caps, however, is relatively minor. The biggest discrepancy between growth and value is seen in large cap stocks.
Chart 4
Chart 5
LARGE CAP VALUE MUCH STRONGER THAN GROWTH... Charts 6 and 7 show the discrepancy between large cap value and large cap growth. Through Friday, the S&P Large Cap 500 Value Index had reached new high ground. Chart 7 shows, however, that the S&P Large Cap Growth Index didn't. Year-to-date, large value has gained 5.2% versus only 2.8% for large cap growth. Over the last month, large cap value gained 4.1% versus only .08% for large cap growth. Here's the moral of the story. Relative strength trends favor small caps over large caps. There's no clear winner between small cap growth or value. Within the large cap category, however, value is much stronger than large cap growth.
Chart 6
Chart 7
