Crisis Fact: Dow Transports and Investors Appetite

crisis fact: Don't miss Opinion Either the Dow transports or the Baltic Dry Index isn't telling the truth, according to Market Watch. And while markets can sometimes defy logic and clamber ever higher, the following chart suggests investors' appetite for assets considered risky, like stocks, has ebbed to levels not seen since the 2008-09 financial crisis Fact Set, Market Watch Caption outside of wrapper for normal article images One gauge of that is relative strength, which technical analysts use to gauge one asset's performance in relation to another. Although the three main U.S. stock indexes the Dow Jones Industrial Average DJIA, 0.90% S&P 500 SPX, 0.46% and Nasdaq Composite index COMP, 0.59% continue to climb to records, there are some early warnings that trouble lies beneath the surface of an otherwise run-of-the-mill ascent to fresh heights. In this case, the Russell 2000 Index of small-capitalization stocks RUT, 0.78% has actually been stable on an absolute basis over the past six months, but that is not a good thing when the S&P 500 index SPX, 0.46% tracking large-capitalization stocks has surged to all-time highs above 3,000. Why is it important to measure how small-cap stocks have performed relative to large-caps Small caps are more sensitive to liquidity issues, both good and bad, said Tom McClellan, publisher of the McClellan Market Report, in a recent research note. On Thursday, the S&P 500 rose 0.2% to a record close, while the Russell 2000 fell 0.5% to close 10.5% below its record, which was reached back in August 2018. (news.financializer.com). As reported in the news.