The Untold Story of Market Performance: Small-Caps & Lumber Prices Struggle Amidst FAAMG Success
Time for a Reality Check
The equity markets have been riding the coattails of mega-cap growth stocks in 2023. This past week was a big one for the heavyweights since many delivered their Q1 earnings reports. For the most part, they delivered. Microsoft and Facebook delivered the biggest gains for the market. Alphabet also reported positive results, but its share price gains were much more modest. Amazon, however, issued a warning (more on that in a second). The overall results were enough to lift the Nasdaq by nearly 2% and the S&P 500 by roughly 1%.
If you look beyond those names, however, the results weren’t nearly as positive. The equal-weight S&P 500 was virtually flat for the week. Small-caps were down more than 1%. Long-term Treasuries gained nearly 2%. Lumber prices fell by 10%. The only asset class not confirming this broader trend was utilities, which was the worst-performing sector of the week. Investors usually count on the FAAMG names to give the markets a boost during earnings week. They did that again this past week, but a broader look at the markets suggest that it didn’t really lift sentiment all that much, if at all.
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