Bespoke: Average Small Cap Stock in “Bear Market” Territory FYI: Most people watching have noticed that the recent weakness in equities has been especially tough on the small-cap space, and another illustration of that trend is to look at the distance that stocks are currently trading from their
52-week highs. Within the large-cap S&P
500, the average stock is currently 13.2% below its
52-week high. Moving down the market cap spectrum, though, the numbers get progressively worse. In the S&P 400 mid-cap space, the average spread is 16.9%, while members of the S&P 600 Small Cap index are down an average of 20.7%. Using the standard bear market definition of a 20% decline from a high, the average small-cap stock is in a bear market!
Looking at the spreads between current prices and
52-week highs, stocks in the Consumer Discretionary sector are further from their highs than any other sector (-22.9%), but Technology isn’t far behind at 21.4%. For two sectors that were market leaders, Tech and Discretionary have certainly seen a good deal of profit-taking lately. Outside of these two, other sectors where the ‘average’ stock has seen a pretty sizable pullback from its
52-week high include Materials (-19.8%), Health Care (-17.9%), and Consumer Staples (-16.6%). On the other end of the spectrum, Utilities (-6.1%) is the only sector where stocks are currently down by an average of less than 10% from their
52-week highs.
Regards,
Ted
https://www.bespokepremium.com/think-big-blog/average-small-cap-stock-in-bear-market-territory/
5 Reasons Investors Should Take A Fresh Look At Big Pharma: (XPH) FYI: The SPDR S&P Pharmaceuticals ETF (XPH) hasn’t quite kept pace with the market this year, but Guggenheim sees brighter days ahead for big drugmakers.
Where we were: XPH has risen
5.2% year to date, even as plenty of analysts have argued the bull case for pharma stocks.
Where we’re headed: Innovation and new product launches should set the stage for more profitability, says Guggenheim.
Health care has been the second-best performing sector this year, with the Health Care Select Sector SPDR ETF (XLV) rising more than 14.3% year to date, not far from the Technology Select Sector SPDR ETF’s (XLK) 14.7% gain, as market-leader tech has been tarnished lately. Yet big drugmakers haven’t necessarily seen much of the benefit, as XPH’s performance shows.
Nonetheless, Guggenheim’s Seamus Fernandez writes that he sees a positive outlook for the global pharma sector, as headwinds fade and innovation and new drugs boost sales and an earnings per share compound annual growth in the mid- to upper single-digits from next year through 2024.
Regards,
Ted
https://www.barrons.com/articles/5-reasons-investors-should-take-a-fresh-look-at-big-pharma-1539103777?refsec=etfsM* Snapshot XPH:
https://www.morningstar.com/etfs/ARCX/XPH/quote.html
