The stock market has bounced in the last week and a half, but smaller market value stocks have underperformed. The issue is that interest rates are set to remain high for at least the next several months—a problem for the entire equity market.
The 10-year Treasury yield, which is currently hovering around 4.2%, also remains below the multiyear high of just over 4.3% that it hit in early August. The yield stabilizing is good news for a stock market which is looking for a still-growing U.S. economy to remain resilient. The S&P 600 index, which consists of smaller market value companies, has been about flat since Aug. 17—but if the market were fully optimistic about growth, it would be outperforming. Improving economic growth tends to give smaller companies’ earnings a larger boost than those of larger companies. This is because smaller firms often have more interest expenses and other fixed costs, so when sales rise, profits rise more rapidly.
The kicker, though, is that higher rates dent the economy on a delay. The fact that the U.S. economy has maintained above 2% growth in the first quarter of this year—which is almost unchanged from the fourth quarter of 2022—might mean that the growth can only slow down from here.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:
Nigeria Nigeria Latest News, Nigeria Nigeria Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Stock Market News: Nvidia, Dollar Tree, Boeing stock movers, Subway chain soldNvidia, Wall Street’s AI darling, did not disappoint pushing shares near record, Dollar Tree latest retailer to warn on crime, Boeing reveals 737 Max supplier defect, Subway sandwich chain sold and investors weigh in on Fox GOP debate highlights. FOX Business is providing real-time updates on the markets, commodities and all the most active stocks on the move.
Source: FoxBusiness - 🏆 458. / 53 Read more »
Here are the odds that the stock market will crashA reality check on investors’ current beliefs about the likelihood of a crash.
Source: MarketWatch - 🏆 3. / 97 Read more »
Stock-market focus 'clearly on Powell'With Nvidia earnings out of the way, stock-market investors and traders are all about Fed Chair Jerome Powell's Friday morning speech. “The rally this week off the near-term Aug. 17 low appears to be fading, but the focus is clearly on Jay Powell speaking tomorrow,” said Louis Navellier, founder of
Source: MarketWatch - 🏆 3. / 97 Read more »
Berkshire Hathaway Inc. Cl B stock rises Thursday, outperforms marketShares of Berkshire Hathaway Inc. Cl B inched 0.01% higher to $354.30 Thursday, on what proved to be an all-around rough trading session for the stock...
Source: MarketWatch - 🏆 3. / 97 Read more »
Microsoft Corp. stock falls Thursday, underperforms marketShares of Microsoft Corp. shed 2.15% to $319.97 Thursday, on what proved to be an all-around poor trading session for the stock market, with the S&P 500...
Source: MarketWatch - 🏆 3. / 97 Read more »
Apple Inc. stock falls Thursday, underperforms marketShares of Apple Inc. slipped 2.62% to $176.38 Thursday, on what proved to be an all-around poor trading session for the stock market, with the NASDAQ...
Source: MarketWatch - 🏆 3. / 97 Read more »