Nasdaq 100, S&P 500 futures red; Dow futures edge up
Initial jobless claims 223k vs 220k estimate
Euro STOXX 600 index up ~0.2%
Dollar ~flat; crude edges up; gold dips; bitcoin off ~1.5%
U.S. 10-Year Treasury yield rises to ~4.63%
Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com
SMALL-CAP TECH STIRRING A BIT VS LARGE-CAP TECH
Over the past several years, large caps have been dominant, and underpinned by strength in a number of Magnificent Seven names, large-cap tech has been especially strong.
While small caps and small-cap tech have been laggards, early in the new year, small-cap tech is showing some fight vs large-cap tech.
Out of the 2025 starting gate, the Invesco smallcap information tech ETF PSCT.O is up 4.3% so far this year. This compares to a 3.8% rise for the technology select sector SPDR fund XLK.P.
It's early in the year of course, but the last time that the PSCT and XLK both advanced for the year, and small-cap tech outperformed large-cap tech, was 2016.
A check of the PSCT/XLK ratio shows that small-cap tech hit an all-time relative strength low vs large-cap tech in mid-June of last year:
Since then, the ratio, which ended Wednesday at 0.2063, has essentially moved sideways with the June trough at 0.2007 continuing to hold.
Meanwhile, traders are eyeing the spread between the ratio's 50- and 200- day moving averages $(DMA)$.
The 50-DMA has been below the 200-DMA since April 4 of last year. However, with the spread between these closely followed intermediate- and longer-term moving averages having now contracted to a more than nine-month low, the ratio may be poised to awake from its recent slumber, one way or the other.
A sufficient ratio thrust above its 200-DMA, which ended Wednesday at 0.2128, that leads to the 50-DMA crossing above the longer-term MA may signal the potential for a more enduring turn in favor of small-cap tech over large-cap tech.
Conversely, new ratio lows could see the longer-term trend of small-cap tech underperformance resume in earnest.
(Terence Gabriel)
*****
FOR THURSDAY'S EARLIER LIVE MARKETS POSTS:
ONE MONTH UNTIL GERMANY VOTES: THE IMPACT ON STOCKS - CLICK HERE
SHOULD THE ECB WORRY ABOUT POLICY TRANSMISSION? - CLICK HERE
IS POPULISM A CONCERN? "GO LONG FINANCIALS" - CLICK HERE
TECH DRAG, MIXED EARNINGS, BANKS UP - CLICK HERE
BEFORE THE BELL: FUTURES DIPS, PREPARING FOR EARNINGS SEASON - CLICK HERE
CHINA'S SHOT IN THE ARM FOR MARKETS - CLICK HERE
smallcaptechvslargecaptech01232025 https://tmsnrt.rs/40K0YpS
(Terence Gabriel is a Reuters market analyst. The views expressed are his own)
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.