The Hardest-Working Americans Are Now 'Very Bullish'
Today, I want to talk about a group of people I admire... They're some of the hardest workers in America. Their dedication, grit, and productivity are nothing short of inspiring. And now, the Power Gauge is taking notice of their efforts...
The Hardest-Working Americans Are Now 'Very Bullish'
By Vic Lederman, editorial director, Chaikin Analytics
Today, I want to talk about a group of people I admire...
They're some of the hardest workers in America. Their dedication, grit, and productivity are nothing short of inspiring. And now, the Power Gauge is taking notice of their efforts...
I'm talking about the employees at small-cap industrial companies.
Before we dive in, let me quickly define a couple of terms...
By "small cap," I'm talking about companies with a market cap between $300 million and $2 billion. That's the total value of all the company's shares of stock.
And when I say "industrial," I mean companies that make goods or produce materials.
In other words... these companies are the bedrock of the American economy.
The men and women working for these companies aren't just clocking in and out. They're putting in blood, sweat, and tears to help build the future of our country.
I'm not kidding...
Manufacturing accounts for just 8% of U.S. employment – and roughly 35% of our productivity growth. And not surprisingly, it captures around 20% of capital investment.
Those numbers are massive, folks.
That's why investors like us always need to pay attention to small-cap industrial companies. And it's why it matters so much that the Power Gauge is now "very bullish" on this space...
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But the thing is, small-cap industrials suffered last year...
The Invesco S&P SmallCap Industrials Fund (PSCI) is our preferred way to track this space.
From its peak in November 2021 through its September 2022 bottom, PSCI lost roughly 25% of its value. That's worse than the S&P 500 Index's loss of about 21% over that span.
But now, the trend is reversing...
You can see in the following chart that PSCI is up around 19% since late April. That's much better than the S&P 500's roughly 11% gain over the same period. Take a look...
The broad market is doing well. But small-cap industrials are doing even better.
With the Power Gauge's help, we can see that PSCI's outperformance is likely to continue...
Today, PSCI earns a "very bullish" rating from the Power Gauge. That means most of the stocks in this exchange-traded fund ("ETF") are "bullish" or better. Take a look...
We're seeing the trend reversal in small-cap stocks elsewhere, too...
The iShares Russell 2000 Fund (IWM) is our preferred measure for small caps as a whole.
At the end of July, IWM also flipped to a "bullish" rating in the Power Gauge. And like PSCI, it has also beaten the S&P 500 over the past few months.
These days, we're spending a lot of time on the mega-cap market dominators. After all, the so-called "Magnificent Seven" stocks are leading the market higher right now.
But as we've seen today, small-cap industrial stocks are thriving as well. In fact, they've done better than the broad market over the past few months.
PSCI isn't the kind of ETF you'd buy if you want to make big returns. But its recent strength helps us see that the bedrock of the American economy is doing just fine today.
Good investing,
Vic Lederman
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
-0.21%
14
13
3
S&P 500
-0.29%
179
245
75
Nasdaq
-0.16%
57
36
6
Small Caps
-0.28%
643
951
347
Bonds
-2.34%
Energy
+1.01%
2
18
3
— According to the Chaikin Power Bar, Large Cap stocks and Small Cap stocks are Bullish.. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Energy
+1.41%
Staples
+0.11%
Financial
-0.23%
Communication
-0.36%
Discretionary
-0.47%
Industrials
-0.53%
Materials
-1.09%
Information Technology
-1.16%
Health Care
-1.42%
Real Estate
-1.47%
Utilities
-3.65%
* * * *
Industry Focus
NYSE Technology Services
30
5
0
Over the past 6 months, the NYSE Technology subsector (XNTK) has outperformed the S&P 500 by +11.40%. Its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #1 of 21 subsectors.
Top Stocks
LRCX
Lam Research Corpora
AMAT
Applied Materials, I
QCOM
QUALCOMM Incorporate
* * * *
Top Movers
Gainers
CLX
+8.96%
CTSH
+7.85%
APA
+6.79%
CDAY
+6.78%
WRK
+6.18%
Losers
DXC
-29.44%
EXPE
-16.38%
ETSY
-13.69%
PYPL
-12.32%
QCOM
-8.18%
* * * *
Earnings Report
Reporting Today
Rating
Before Open
After Close
CEG, LYB
HII, NWSA, TTWO
CBOE, FOXA, JCI, TECH
CDAY, DXC, EOG, MET, MRNA
D, DUK, EVRG, FIS, NI, PPL
AES, ATO, ILMN, PODD
No earnings reporting today.
Earnings Surprises
WBD Warner Bros. Discovery, Inc.
Q2
$-0.44
Missed by $-0.36
CEG Constellation Energy Corporation
Q2
$3.67
Beat by $2.89
NET Cloudflare, Inc.
Q2
$0.08
Beat by $0.05
COIN Coinbase Global, Inc.
Q2
$0.45
Beat by $1.32
TRGP Targa Resources Corp.
Q2
$-0.56
Missed by $-1.93
* * * *
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