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Small cap index: A ‘small window’ for traders before Wyoming symposium

17:42, 12 August 2022

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  • UK100
    UK 100
    6879.2 USD
    -4.3 -0.060%

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Small cap stocks could experience 'small window' to outperform ahead of Jackson Hole - Photo: Getty Images

The big US stocks are predicted to struggle ahead of the annual Jackson Hole Symposium later this month, while smaller companies in the Russell 2000 (RTY) reposition as a potential opportunity.

Despite the latest CPI report showing better-than-expected inflation data, reaching 8.5% year-over-year, but falling short of the 8.7% market predictions, mega cap stocks could suffer until the US Federal Reserve is convinced pricing pressures have alleviated, leaving a small opening for cheaper and more volatile tickers.

Russell 2000 (RTY) price chart

In an interview with Capital.com, Edward Moya, senior market analyst for OANDA in New York, said “cooling inflation could be a signal the Fed can deliver a soft-landing.”

“Small cap stocks and the Russell 2000 might have a tight window to outperform leading up to the Jackson Hole Symposium, as multi-nationals battle FX swings and a slowdown in global economic growth,” he added.

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Why small cap stocks and the Russell 2000?

Michael Sincere, best-selling author of Understanding Stocks and Understanding Options told Capital.com, “The market will be volatile before the symposium and small cap stocks are even more unstable with wild press swings.”

“But they are cheaper and susceptible to big moves, so it is appealing to intraday traders,” he continued. “The risks do increase with small cap, so it’s a two-way street - risk vs reward.”

AAPL

142.43 Price
-4.750% 1D Chg, %
Long position overnight fee -0.0064%
Short position overnight fee -0.0059%
Overnight fee time 21:00 (UTC)
Spread 0.05

TSLA

269.43 Price
-6.230% 1D Chg, %
Long position overnight fee -0.0308%
Short position overnight fee -0.0137%
Overnight fee time 21:00 (UTC)
Spread 0.33

AMZN

115.21 Price
-2.460% 1D Chg, %
Long position overnight fee -0.0064%
Short position overnight fee -0.0059%
Overnight fee time 21:00 (UTC)
Spread 0.31

NVDA

122.13 Price
-4.050% 1D Chg, %
Long position overnight fee -0.0064%
Short position overnight fee -0.0059%
Overnight fee time 21:00 (UTC)
Spread 0.15

Small cap stocks: What are they?

Small cap stocks are shares of smaller companies like ShockWave Medical (SWAV), Sailpoint Technologies (SAIL), Southwestern Energy Co. (SWN), and Antero Resources Group (AR).

Some other noted small cap stocks include BJ’s Wholesale (BJ) and Avis Budget Group (CAR).

Antero Resources Group (AR) price chart

What is the Russell 2000?

The Russell 2000 is a US index made up of 2,000 small companies in the wider Russell 3000 Index, and is also known as the SmallCap 2000, with members accounting for roughly 8% of the Russell 3000's total market capitalisation.

What is the Jackson Hole Symposium?

The Federal Reserve Bank of Kansas City’s Economic Policy Symposium is an annual meeting in Jackson Hole, Wyoming, that brings together economists, academics and US government representatives to discuss key financial issues.

 

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