An hour ago
Small caps face tough earnings season, says Michael Kantrowitz
Investors shouldn’t be chasing small caps, according to Piper Sandler’s Michael Kantrowitz. The firm’s chief investment strategist says the move in the Russell 2000, which rose about 3.6% on Thursday, is a knee-jerk reaction.
“What’s dominant today is interest rate-sensitive stocks and risk, low quality,” he told CNBC’s “Power Lunch.” “The problem with buying low-quality, risky stocks is that when earnings season comes around, and particularly because we’ve seen bad macro news, rising unemployment, lower inflation, you’re going to have earnings that don’t quite measure up to expectations.”
The strategist thinks other sectors such as utilities or emerging markets are more favorable in the current macro environment. With the consumer price index down 0.1% from May, he thinks inflation is “old news.”
“It’s time to look beyond inflation, and I think the market is finally ready for that,” he continued.
—Sean Conlon
2 hours ago
Regional bank stock ETF rose most since March on Thursday
Whether it was a better inflation report, a bond market rally that sent fixed-income yields lower, a less inverted yield curve or the more positive prospect of the Federal Reserve cutting rates soon, a regional bank-euro-traded fund posted its best one-day gain since March 5 on Thursday.
The SPDR S&P Regional Banking ETF rose 4.21% on Thursday, bringing its gain for the week to 8.41%. The S&P Composite Regional Bank index rose 3.75% on Thursday and is up 7.60% for the week.
But a host of individual banks far outperformed those benchmarks. Eagle Bancorp of Bethesda, Maryland, rose 7.4% on Thursday. Brookline Bancorp outside Boston and ServisFirst Bancshares of Birmingham, Alabama, both rose 7.1%. Valley National Bancorp in suburban New Jersey climbed 7% and Tompkins Financial Corporation in Ithaca, New York, added 6.8%.
So far this week, Valley National is up 13.7%, Eagle Bancorp is up 13.3%, Tompkins Financial is up 10.7%, ServisFirst is up 10.4% and Brookline is up 10.3%.
See graph…
SPDR S&P Regional Banking ETF over the past month.
2 hours ago
Private airline Wheels Up soars 20% as Russell 2000 rises
The Russell 2000 had a good day, closing up nearly 3.6% as investors flocked to small-cap stocks. Wheels Up, a member of the index, saw its shares rise more than 20%.
Wheels Up, a provider of on-demand private flights, also saw 111% growth in July, on track for its best month ever.
According to FactSet, Delta Air Lines is the company’s largest shareholder, holding a 38% stake at the end of March.
Fellow Russell 2000 member Joby Aviation also found a tailwind, rising 19.7% in Thursday’s trading, the stock’s best session since June 28, 2023.
— Darla Market, Gina Francolla
2 hours ago