CME - Russell 2000: Small Companies as the Engine of Job Growth

August 14, 2017 9:10AM CDT

‘Tis the season for stock rotations.  Stock market sectors tend to fall in and out of favor with regularity, shifting price patterns more often than well-diversified indexes.  Indexes, too, see rotations, especially when there are significant differences among their underlying composition of companies.  And, depending on which scenario one favors for the U.S. and global economies – expanding or contracting growth -- signs are that the second half of 2017 might see turbulence in how the major indexes perform relative to each other –  extracting from the general trend in U.S. equities.  To illustrate the differences, we compare and contrast three key indexes for U.S. stocks – the Russell 2000, S&P500®, and Nasdaq 100.

The first key difference in them is company size.  Both the S&P500® and Nasdaq 100 are composed of publicly-traded companies with large market capitalization, while the Russell 2000 is designed to track small-capitalized companies.  The largest companies in the Nasdaq 100 and S&P500® are mega-stocks with familiar names, such as Apple, Microsoft, Amazon, Facebook, and Alphabet, the holding company of Google, with market capitalization in the hundreds of billions of dollars. 



To read the rest of the article, click here!

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgement at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.